DCF Studio

    WYNN · NMS · Consumer Cyclical

    Wynn Resorts, Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 257.66

    Market price

    USD 81.68

    Implied upside

    +215.5%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Value Per Share

    Perpetuity growth
    USD 257.66+215.5%
    Exit multiple
    USD 336.04+311.4%
    Market price
    USD 81.68

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn3bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 8.8bnUSD 10.9bnUSD 13.6bnUSD 16.8bnUSD 20.8bn+23.9%
    EBITUSD 1.1bnUSD 1.3bnUSD 1.6bnUSD 2.0bnUSD 2.5bn+23.9%
    NOPATUSD 958.2mUSD 1.2bnUSD 1.5bnUSD 1.8bnUSD 2.3bn+23.9%
    Add depreciation & amortisationUSD 1.0bnUSD 1.3bnUSD 1.6bnUSD 2.0bnUSD 2.4bn+23.9%
    Less capital expenditureUSD -672.9mUSD -833.4mUSD -1.0bnUSD -1.3bnUSD -1.6bn+23.9%
    Less increase in working capitalUSD -102.2mUSD -126.6mUSD -156.8mUSD -194.2mUSD -240.5m+23.9%
    Free cashflow to firmUSD 1.2bnUSD 1.5bnUSD 1.9bnUSD 2.3bnUSD 2.9bn+23.9%
    Discount factor0.96680.90350.84450.78920.7376-
    Present valueUSD 1.2bnUSD 1.4bnUSD 1.6bnUSD 1.8bnUSD 2.1bn+15.8%
    Present Value Of The ForecastUSD 8.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.994Reported 0.991, pulled toward 1.0 (Blume)
    Cost of equity10.46%Risk-free + beta x equity risk premium
    Cost of debt5.14%Interest expense / average total debt
    Market capitalisationUSD 8.4bn40.9% of capital
    Total debtUSD 12.2bn59.1% of capital, book value as a proxy
    Tax rate10.5%Effective, capped at statutory
    WACC7.00%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 257.66

    78% of EV

    Forecast FCFF, final year
    USD 2.9bn
    Capex at depreciation, working capital in reinvestment
    USD 2.3bn
    Less reinvestment at g/ROIC (23.8% of NOPAT)
    USD -536.2m
    Capitalised
    USD 1.7bn
    ROIC (reported)
    10.5%
    Terminal value, undiscounted
    USD 39.2bn
    Terminal value, discounted
    USD 28.9bn
    Enterprise value
    USD 37.0bn
    Less net debt
    USD 10.1bn
    Equity value
    USD 26.9bn

    Exit at 10.1x EBITDA

    Value per shareUSD 336.04

    82% of EV

    Terminal value, undiscounted
    USD 50.3bn
    Terminal value, discounted
    USD 37.1bn
    Enterprise value
    USD 45.1bn
    Less net debt
    USD 10.1bn
    Equity value
    USD 35.0bn

    Spread between methods: 26%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.00%416.94463.45528.26625.12786.15
    6.00%304.61326.49354.41391.38442.85
    7.00%233.03244.19257.66274.32295.51
    8.00%183.41189.21195.94203.88213.41
    9.00%146.95149.85153.09156.75160.95

    Outlined: this model. Green text: above today's price of 81.68. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year23.9%6.1%-17.7pp
    EBIT margin12.1%5.8%-6.3pp
    Discount rate7.0%12.0%+5.0pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.