Core Insights - Melco Resorts & Entertainment Limited reported a total operating revenue of US$1.31 billion for Q3 2025, marking an 11% increase from US$1.18 billion in Q3 2024, driven by improved gaming and non-gaming performance [2][4] - The company's operating income rose to US$184.5 million in Q3 2025 from US$138.6 million in Q3 2024, indicating strong operational efficiency [2][4] - Adjusted Property EBITDA increased to US$380.4 million in Q3 2025, up from US$322.6 million in the same quarter of the previous year, reflecting enhanced profitability [3] Financial Performance - Net income attributable to Melco for Q3 2025 was US$74.7 million, or US$0.19 per ADS, compared to US$27.3 million, or US$0.06 per ADS, in Q3 2024 [4] - The company reported a net loss attributable to noncontrolling interests of US$12.6 million in Q3 2025, down from US$14.6 million in Q3 2024 [4] - Total cash and bank balances as of September 30, 2025, were US$1.61 billion, including US$125.2 million of restricted cash [32] Gaming Operations - Rolling chip volume increased to US$5.58 billion in Q3 2025 from US$3.30 billion in Q3 2024, with a win rate of 3.68% compared to 3.97% in the previous year [7] - Mass market table games drop rose to US$1.66 billion in Q3 2025 from US$1.40 billion in Q3 2024, with a hold percentage of 29.8% [8] - Gaming machine handle for Q3 2025 was US$1.04 billion, up from US$0.94 billion in Q3 2024, maintaining a win rate of 3.2% [8] Non-Gaming Revenue - Total non-gaming revenue at City of Dreams was US$94.8 million in Q3 2025, compared to US$78.7 million in Q3 2024 [9] - Non-gaming revenue at Studio City was US$85.9 million in Q3 2025, slightly down from US$89.3 million in Q3 2024 [12] - Non-gaming revenue at City of Dreams Mediterranean and Other increased to US$30.4 million in Q3 2025 from US$25.0 million in Q3 2024 [28] Regional Performance - In the Philippines, Property EBITDA grew 45% quarter-over-quarter, while in Cyprus, City of Dreams Mediterranean and satellite casinos achieved a 53% year-over-year increase in Property EBITDA [6] - City of Dreams Manila reported total operating revenues of US$110.7 million in Q3 2025, down from US$118.9 million in Q3 2024, with a decrease in both gaming machine and non-gaming operations [20][23] - Studio City saw total operating revenues of US$375.3 million in Q3 2025, compared to US$364.7 million in Q3 2024, with Adjusted EBITDA rising to US$104.7 million [10] Capital Expenditures and Debt Management - Capital expenditures for Q3 2025 were US$67.6 million, focusing on enhancement projects at City of Dreams and Studio City [37] - Total debt at the end of Q3 2025 was US$7.35 billion, with significant repayments made during the quarter [32][34] - Available liquidity, including cash and undrawn revolving credit facilities, was approximately US$2.60 billion as of September 30, 2025 [36]

Group 1 - JetBlue Airways Corp is focusing on expanding its market presence and improving operational efficiency to enhance profitability [1] - Bausch Health Companies Inc is undergoing a strategic transformation aimed at reducing debt and improving its financial health [1] - The Wendy's Co is leveraging digital initiatives and menu innovation to drive sales growth and enhance customer experience [1] Group 2 - Melco Resorts & Entertainment Ltd is experiencing a recovery in its operations as tourism rebounds, leading to increased revenue [1] - The overall market analysis indicates a positive outlook for the travel and hospitality sector as consumer demand rises [1] - Companies in the industry are adapting to changing consumer preferences and investing in technology to stay competitive [1]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Melco Resorts, driven by higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Melco Resorts is expected to report quarterly earnings of $0.11 per share, reflecting a year-over-year increase of 37.5% [3]. - Revenues are projected to reach $1.29 billion, representing a 9.4% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 2.86% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Melco is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +9.09% [12]. Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10]. - Melco's current Zacks Rank is 3, suggesting a likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, Melco exceeded expectations by posting earnings of $0.23 per share against an expected $0.09, resulting in a surprise of +155.56% [13]. - Over the past four quarters, Melco has beaten consensus EPS estimates twice [14]. Industry Comparison - Another player in the gaming industry, Brightstar, is expected to report earnings of $0.21 per share, with a year-over-year change of 0% [18]. - Brightstar's consensus EPS estimate has been revised down by 25% in the last 30 days, leading to a negative Earnings ESP of -2.44% [19].

Core Insights - Melco Resorts & Entertainment Ltd is considered one of the most undervalued stocks in Hong Kong according to analysts [1] - The company has launched the world's first integrated resort hospital in Macau, in partnership with iRad, enhancing the city's medical tourism infrastructure [2] Company Developments - The newly launched hospital will feature advanced MRI and CT facilities, along with services in aesthetic medicine, longevity treatments, and medical concierge [2] - The initiative aims to attract both regional and international visitors, encouraging longer hotel stays and increased spending [2] - Lawrence Ho, Chairman & CEO, emphasized the alignment of this project with the SAR government's economic diversification strategy [2] Analyst Ratings - JP Morgan analyst DS Kim reiterated a Buy rating for Melco Resorts & Entertainment Ltd, while lowering the price target from $12 to $10.5 [3] - The company operates integrated resorts in Asia and Europe, offering a mix of gaming, luxury accommodations, and entertainment options [3]

Group 1 - Melco Resorts (MLCO) has shown a year-to-date return of 35.9%, significantly outperforming the average gain of 5% in the Consumer Discretionary sector [4] - The Zacks Rank for Melco Resorts is currently 1 (Strong Buy), indicating strong analyst sentiment and a positive earnings outlook, with a 122.4% increase in the consensus estimate for full-year earnings over the past three months [3] - The Gaming industry, to which Melco Resorts belongs, has seen an average gain of 15.9% year-to-date, further highlighting MLCO's strong performance relative to its peers [5] Group 2 - The Consumer Discretionary group, which includes Melco Resorts, is currently ranked 8 within the Zacks Sector Rank, which evaluates 16 different groups based on the average Zacks Rank of individual stocks [2] - Another notable stock in the Consumer Discretionary sector is Adtalem Global Education (ATGE), which has a year-to-date return of 56.9% and a Zacks Rank of 2 (Buy) [4][5] - Investors are encouraged to monitor both Melco Resorts and Adtalem Global Education for their potential to maintain solid performance in the Consumer Discretionary sector [6]

Core Viewpoint - UBS reports that Wynn Macau (01128) significantly increased its market share in September, rising approximately 200 basis points month-over-month, contributing to a quarterly increase of 150 basis points in Q3 [1] Company Summaries - Wynn Macau (01128) saw a notable rise in market share, with a month-over-month increase of about 200 basis points and a quarterly increase of 150 basis points [1] - SJM Holdings (00880) experienced a month-over-month market share increase of approximately 50 basis points in September, but a decline of 30 basis points in Q3 [1] - Sands China (01928) and Galaxy Entertainment (00027) reported a month-over-month decline in market share of about 100 basis points and 150 basis points respectively in September, although both saw quarterly increases of approximately 70 basis points and 40 basis points [1] - Melco Resorts (MLCO.US) and MGM China (02282) maintained stable market shares in September, but both experienced quarterly declines of 120 basis points and 100 basis points respectively [1] - Compared to market expectations, the market shares of Galaxy Entertainment and Wynn Macau exceeded expectations, while those of MGM, Sands China, and SJM Holdings fell short [1]

Core Viewpoint - UBS report indicates that Wynn Macau (01128) significantly increased its market share in September, rising approximately 200 basis points month-over-month, contributing to a quarterly increase of 150 basis points in Q3 [1] Group 1: Market Share Changes - Wynn Macau's market share in September rose significantly, leading the market with a 200 basis points increase month-over-month and a 150 basis points increase quarter-over-quarter [1] - The second highest market share increase was observed in SJM Holdings (00880), which saw a month-over-month rise of about 50 basis points in September, but a decline of 30 basis points in Q3 [1] - Sands China (01928) and Galaxy Entertainment (00027) experienced declines in market share in September, with decreases of approximately 100 basis points and 150 basis points, respectively, although both companies saw quarterly increases of about 70 basis points and 40 basis points in Q3 [1] - Melco Resorts (MLCO.US) and MGM China (02282) maintained their market share in September, but both experienced declines of 120 basis points and 100 basis points, respectively, in Q3 [1] Group 2: Market Expectations - Compared to market expectations, the market shares of Galaxy Entertainment and Wynn Macau were higher than anticipated, while those of MGM, Sands China, and SJM Holdings were lower than expected [1]

Industry Overview - The Zacks Gaming industry is experiencing growth due to increased gaming revenues in Macau, strong demand for sports betting, and robust U.S. commercial gaming revenues [1][3][4] - The industry includes companies that operate integrated casinos, hotels, and entertainment resorts, as well as those providing technology products and services in gaming markets [2] Key Themes - Macau's gross gaming revenues (GGR) reached MOP 22.15 billion ($2.76 billion) in August, marking a 12.2% year-over-year increase and a 0.1% gain from July [3] - U.S. commercial gaming revenues rose 9.8% year-over-year in Q2 2025, totaling $19.44 billion from traditional casino games, sports betting, and iGaming [4] - The legalization of sports betting across multiple states has significantly contributed to industry growth, with popular gaming applications including DraftKings and FanDuel [5] Economic Factors - Ongoing economic uncertainty, rising inflation, and geopolitical tensions pose challenges to the gaming industry, potentially reducing consumer discretionary spending [6] Industry Performance - The Zacks Gaming industry ranks 96, placing it in the top 39% of over 245 Zacks industries, indicating positive near-term prospects [7][8] - The industry has outperformed the S&P 500 Index, rising 37.3% over the past year compared to the S&P 500's 19.9% growth [10] Valuation Metrics - The industry has a trailing 12-month EV/EBITDA ratio of 21.45, which is higher than the S&P 500's ratio of 18.35, reflecting a premium valuation [13] Notable Companies - **Boyd Gaming**: Benefits from a diversified business model and operational efficiencies, with a 4.9% increase in 2025 earnings estimates to $6.89 [17][18] - **Red Rock Resorts**: Strong performance from Durango Casino Resort and Las Vegas operations, with a 12.7% increase in 2025 earnings estimates to $1.77 [20][22] - **Melco Resorts & Entertainment**: Strong momentum in Macau operations, with a 69% surge in 2025 earnings estimates to $0.49 [24][25]

Core Viewpoint - Melco Resorts Finance Limited is proposing an international offering of senior notes to fund a conditional cash tender offer for its existing senior notes and for general corporate purposes [1][9]. Group 1: New Notes Offering - The New Notes will be senior obligations of Melco Resorts Finance, ranking equally with existing and future senior indebtedness, with Melco not acting as a guarantor [2]. - The interest rate and terms of the New Notes will be determined at the time of pricing, and the offering is subject to market conditions and investor interest [3]. - The proceeds from the New Notes Offering are expected to fund the Conditional Tender Offer, cover related fees, and potentially redeem any remaining Existing Notes [9][10]. Group 2: Conditional Tender Offer - Melco Resorts Finance has initiated a conditional cash tender offer for its outstanding 5.250% senior notes due 2026, contingent upon the successful completion of the New Notes Offering [4]. - The Conditional Tender Offer will expire on September 19, 2025, unless extended or terminated, with settlement expected on September 24, 2025 [4][5]. - The consideration for each US$1,000 principal amount of Existing Notes will be US$1,000, with minimum denominations of US$200,000 [5]. Group 3: Redemption and Management - Melco Resorts Finance intends to redeem any Existing Notes not purchased in the Conditional Tender Offer, but is not obligated to do so [6]. - The Conditional Tender Offer is being conducted according to the terms set out in the Offer to Purchase, which will be distributed to holders by Kroll Issuer Services Limited [7]. - Deutsche Bank AG and Morgan Stanley & Co. LLC are acting as dealer managers for the Conditional Tender Offer [8].

Group 1 - The article focuses on the Asia Value & Moat Stocks research service, which targets value investors looking for Asia-listed stocks with significant discrepancies between price and intrinsic value [1] - The service emphasizes deep value balance sheet bargains, such as net cash stocks and low price-to-book (P/B) stocks, as well as wide moat stocks that represent high-quality businesses [1] - The author provides a range of watch lists with monthly updates, particularly concentrating on investment opportunities in the Hong Kong market [1]