LVS Las Vegas Sands
Scarce Macao-Singapore gaming licenses mispriced on overstated China fear; bear noise, franchise intact.
The story
LVS owns irreplaceable casino concessions and integrated resorts in Macao (5 properties) and Singapore's Marina Bay Sands — a duopoly-like Asian IR franchise that has fully recovered to pre-COVID revenue (~13.7B). It is a mature cash generator with a long reinvestment runway (MBS expansion, Londoner ramp), but China concentration keeps it volatile. The current selloff reflects an earnings miss and Macao-slowdown noise, not franchise impairment.
Keeping prior drivers: nothing structural changed — the earnings miss is within normal Macao GGR volatility and margins (22.6% TTM) are tracking toward the 26% sustainable concession economics as Londoner matures. 6% near-term growth reflects mass-market recovery plus Singapore ramp; terminal 2.5% sits below the 4.76% risk-free rate for a geographic niche business. Beta 1.35 retains the China/Macao risk premium; failure probability 4% reflects concession-renegotiation tail risk.
Value drivers
| Revenue growth (Y1) | 6.0% |
| Terminal growth | 2.5% |
| Forecast horizon | 7y |
| Target operating margin | 26.0% |
| Years to target margin | 5 |
| Sales-to-capital | 0.80 |
| Beta | 1.35 |
| Failure probability | 4.0% |
| Cost of capital (WACC) | 9.3% |
| Terminal WACC | 8.3% |
Valuation bridge
| PV of explicit FCFF | 12.91B |
| PV of terminal value | 31.58B |
| Equity value | 30.91B |
| ÷ shares → per share | $47.73 |
News
bearish -0.30 · 8 articles
- Las Vegas Sands (LVS) Down 0.1% Since Last Earnings Report: Can It Rebound?
- Is Las Vegas Sands (LVS) Below Fair Value On Its Earnings Miss?
- Monolithic Power Systems and Las Vegas Sands have been highlighted as Zacks Bull and Bear of the Day
- Bear of the Day: Las Vegas Sands (LVS)
- WYNN's Q2 Beat Puts Macau Strength and Margin Pressure in Focus
- Is Wynn Resorts Stock a Buy as Macau Growth Meets Rising Capex Risks?
- Las Vegas Sands Stock Outlook: Is Wall Street Bullish or Bearish?
- Humana upgraded, Las Vegas Sands downgraded: Wall Street's top analyst calls
Projected free cash flow to the firm
| Yr | Revenue | Growth | Margin | NOPAT | Reinvest | FCFF | PV |
|---|---|---|---|---|---|---|---|
| 1 | 14.54B | 6.0% | 23.3% | 2.85B | 1.03B | 1.82B | 1.67B |
| 2 | 15.33B | 5.4% | 23.9% | 3.10B | 984.62M | 2.11B | 1.77B |
| 3 | 16.07B | 4.8% | 24.6% | 3.34B | 926.18M | 2.41B | 1.85B |
| 4 | 16.75B | 4.2% | 25.3% | 3.58B | 853.76M | 2.72B | 1.91B |
| 5 | 17.37B | 3.7% | 26.0% | 3.81B | 767.88M | 3.04B | 1.95B |
| 6 | 17.90B | 3.1% | 26.0% | 3.93B | 669.40M | 3.26B | 1.91B |
| 7 | 18.35B | 2.5% | 26.0% | 4.02B | 559.49M | 3.46B | 1.86B |
Key risks
- Macao regulatory/concession risk and China macro swings (visa, anti-corruption, currency) hitting GGR
- MBS Singapore expansion capex overruns delaying returns on ~$8B project
- New Asian IR supply (Japan, Thailand) eroding regional high-value tourism share
- High leverage (net debt ~$12B) amplifies downside in any demand shock
Catalysts
- Marina Bay Sands IR2 expansion opening with incremental gaming/hotel capacity
- Macao mass-market GGR recovery running above bearish consensus
- Rising dividend/buybacks as leverage falls and FCF inflects