Las Vegas Sands Corp (LVS, Financial) has seen a daily loss of -4.06%, with a 3-month loss of -8.22%. Despite an Earnings Per Share (EPS) of 0.07, the question remains: is the stock significantly undervalued? This article aims to explore this question by delving into the valuation analysis of Las Vegas Sands. We encourage our readers to follow along for a detailed financial analysis.
Company Introduction
Las Vegas Sands Corp is the world's largest operator of fully integrated resorts, featuring casino, hotel, entertainment, food and beverage, retail, and convention center operations. The company has a strong presence in Macao and Singapore, with all its EBITDA generated from Asia. The company's stock price currently stands at $52.7, a figure that significantly undervalues the stock when compared to the GF Value of $86.93.
Summarizing GF Value
The GF Value is a unique measure of a stock's intrinsic value, computed based on historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. Our GF Value Line suggests the fair trading value of the stock. If the stock price is significantly above the GF Value Line, the stock is overvalued and future returns may be poor. Conversely, if the stock price is significantly below the GF Value Line, the stock is undervalued, and future returns are likely to be higher.
According to our valuation method, Las Vegas Sands (LVS, Financial) appears significantly undervalued. With its stock price significantly below the GF Value Line, the long-term return of its stock is likely to be much higher than its business growth.
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Financial Strength
Investing in companies with low financial strength could result in permanent capital loss, making it crucial to review a company's financial strength before deciding to invest. Las Vegas Sands has a cash-to-debt ratio of 0.39, ranking worse than 54.72% of 826 companies in the Travel & Leisure industry. Based on this, GuruFocus ranks Las Vegas Sands's financial strength as 4 out of 10, indicating a poor balance sheet.
Profitability and Growth
Consistently profitable companies offer less risk for investors. Las Vegas Sands has been profitable 8 over the past 10 years. Over the past twelve months, the company had a revenue of $6.80 billion and Earnings Per Share (EPS) of $0.07. Its operating margin is 8.74%, ranking better than 56.22% of 820 companies in the Travel & Leisure industry. Overall, the profitability of Las Vegas Sands is ranked 7 out of 10, indicating fair profitability.
Growth is a critical factor in the valuation of a company. Las Vegas Sands's 3-year average revenue growth rate is worse than 88.37% of 765 companies in the Travel & Leisure industry. Its 3-year average EBITDA growth rate is -56.9%, which ranks worse than 94.72% of 606 companies in the Travel & Leisure industry.
ROIC vs WACC
Comparing a company's Return on invested capital (ROIC) and the weighted average cost of capital (WACC) can provide insight into its profitability. For the past 12 months, Las Vegas Sands's ROIC is -96.35, and its cost of capital is 8.39.
Conclusion
Overall, Las Vegas Sands (LVS, Financial) stock appears to be significantly undervalued. The company's financial condition is poor, and its profitability is fair. Its growth ranks worse than 94.72% of 606 companies in the Travel & Leisure industry. To learn more about Las Vegas Sands stock, you can check out its 30-Year Financials here.
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