Sands of Las Vegas (NYSE 🙂 is an integrated developer of resorts.

A typical complex developed by the company includes accommodation, gaming activities, retail, entertainment, etc.

The key markets for Las Vegas Sands are Nevada, Macau and Singapore. I am bearish on the stock. (See Las Vegas Sands stock charts on TipRanks)

Recent performances

The stock is one of the worst performers since the start of the year, with a drawdown of over 34%.

Las Vegas Sands has consistently underperformed the S&P 500, but recent performance has been subdued. The catalysts include declining casino traffic, gambling regulations and leverage in China, and travel restrictions linked to COVID-19.

Gains, debt problems

The company released its second quarter financial results in July, where it missed analysts’ earnings estimates by $ 22 million, due to unexpected restrictions in the event of the Delta pandemic.

Another concern for the group is the percentage of player winnings at Nevada casinos, which has increased by 20% since 2019. It is as if the headwinds are not fading for the big developer.

As a result, Las Vegas Sands now shows constant negative five-year annual growth rates overall, with revenue of -11.4%. Assets have also declined by 17.07% over the past five years, while the company’s leverage has increased by 490.50%, with a negative coverage ratio of -1.8.

Assessment and techniques

Initially, I wanted to think of the stock as a buy back, but the debt issues mentioned above and lackluster value metrics made me change my mind. It would be nothing more than speculation to buy this title at this time.

Las Vegas Sands price-to-delivery and price-to-sales ratios are above the industry average by 276.67% and 417.63%, respectively. Working capital grew 117.25% over the past year due to the liquidation of assets, and there could be a case for growth through further acquisitions, but headwinds in China mean that the group is likely to spend more on restructuring than on acquisitions over the next few years. .

Over the past month, the stock’s RSI has moved from the 25 handle to the 50 handle, with many traders buying the pullback. Yet it has already come back below 50, and I don’t see any form of momentum building up with the trade still falling below its range of moving averages.

Wall Street and hedge funds

Wall Street disagrees with me and thinks the stock is a moderate buy, with an average price target of $ 53 for Las Vegas Sands. There were 3 buy ratings, 5 keep ratings and no sell ratings on the stock.

The hedge fund consensus seems to align a little more with my argument. Hedge fund outflows were significant in the last quarter, with 1.6 million shares sold. The TipRanks hedge fund tracker indicates that there is a very negative consensus among hedge funds.

Final word on LVS

Las Vegas Sands has had a terrible year, which shouldn’t get better as it stands. We’ll have to see what happens with its headwinds in China and its deployment of capital, before the stock can be seen as a downward buy.

Disclosure: At the time of publication, Steve Gray Booyens does not have a position in any of the titles mentioned in this article.

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