Long-established in the Travel & Leisure industry, Las Vegas Sands Corp (LVS, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 0.3%, juxtaposed with a three-month change of -8.33%. Fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Las Vegas Sands Corp.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 5/10
- Profitability rank: 7/10
- Growth rank: 5/10
- GF Value rank: 2/10
- Momentum rank: 2/10
Based on the above method, GuruFocus assigned Las Vegas Sands Corp a GF Score of 65 out of 100, which signals poor future outperformance potential.
Understanding Las Vegas Sands Corp Business
Las Vegas Sands Corp, with a market cap of $29.27 billion and sales of $11.43 billion, is the world's largest operator of fully integrated resorts, featuring casino, hotel, entertainment, food and beverage, retail, and convention center operations. The company owns the Venetian Macao, Sands Macao, Londoner Macao, Four Seasons Hotel Macao, and Parisian Macao, as well as the Marina Bay Sands resort in Singapore. We expect Sands to open a fourth tower in Singapore toward the end of 2028. Its Venetian and Palazzo Las Vegas assets in the US were sold to Apollo and VICI in 2022. With the sale of its Vegas assets, the company generates all its EBITDA from Asia, with its casino operations generating the majority of sales.
Financial Strength Breakdown
Las Vegas Sands Corp's financial strength indicators present some concerning insights about the company's balance sheet health. The company has an interest coverage ratio of 3.64, which positions it worse than 57.64% of 602 companies in the Travel & Leisure industry. This ratio highlights potential challenges the company might face when handling its interest expenses on outstanding debt. It's worth noting that the esteemed investor Benjamin Graham typically favored companies with an interest coverage ratio of at least five.
The company's Altman Z-Score is just 2.36, which is below the safe threshold of 2.99. Although this does not imply immediate danger of financial distress, the stock may face some financial struggles if the Altman Z-score drops below 1.81. Additionally, the company's low cash-to-debt ratio at 0.34 indicates a struggle in handling existing debt levels. The company's debt-to-equity ratio is 3.66, which is worse than 90.73% of 701 companies in the Travel & Leisure industry. A high debt-to-equity ratio suggests over-reliance on borrowing and vulnerability to market fluctuations.
Conclusion
Considering Las Vegas Sands Corp's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. Investors seeking more robust investment opportunities may consider exploring other companies with stronger GF Scores. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
