Here's Why You Should Invest In Melco Resorts (MLCO) Stock

Melco Resorts & Entertainment Limited (NASDAQ:MLCO) is a well-performing gaming stock and a rise in share price and strong fundamentals signal its bullish run. Shares of the company have rallied a massive 72.5% in the past year, outperforming the industry’s gain of 36.3%.

Moreover, upward revision in earnings estimates for 2017 reflects analysts’ unwavering confidence in the company. In the past two months, 2017 earnings estimates increased 2.3%. The company also delivered positive earnings surprises in three of the trailing four quarters, with the average beat being 61.2%.

Per our VGM Score, which identifies the most attractive value, growth and momentum characteristics, Melco has a Growth Score of B, reflecting the stock’s decent growth potential.

Also, the company’s Momentum Score of A indicates that it is the right time to invest in the stock.

Let us delve deeper into the other factors that make this Zacks Rank #2 (Buy) stock a lucrative pick. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Macau’s Momentum a Positive

Per Macau’s Gaming Inspection and Coordination Bureau (“DICJ”), gross gaming revenues (GGR) for December rose 14.6% on a yearly basis. In fact, GGR rose in all the months of 2017. This indicates that the casino hub is firmly on its path to recovery, giving investors enough reason to be bullish on Melco’s performance in the region.

Non-Gaming Segments Making Significant Contribution

Better performance at the non-gaming segments like rooms and food and beverages are driving Melco’s performance and the momentum is expected to continue going forward. Notably, the company’s large-scale resorts provide distinctive lodging, entertainment and retail options, which appeal to a broader customer base.

Melco Crown Entertainment Limited Revenue (TTM)

VIP Table Addition and Cost Control Initiatives Bode Well

Melco Resorts’ cost-control efforts including effective management of marketing expenses are expected to continue driving profits and margins. Markedly, the addition of new VIP tables at the company’s Studio City property is also aiding in delivering a broader product offering to a wider breadth of customers. This, in turn, is expected to continue driving the company’s results going forward.

Management expects Philippines’ gaming industry to be supported by the country's robust economic growth and its expanding inbound tourism. Thus, Melco’s Entertainment City property therein is poised to benefit from this growth.

Other Stocks to Consider

Other stocks worth considering in the same space are Red Rock Resorts, Inc. (NASDAQ:RRR) , Las Vegas Sands (NYSE:LVS) and Boyd Gaming Corporation (NYSE:BYD) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Red Rock Resorts, Las Vegas Sands and Boyd Gaming Corporation are expected to witness a respective 298.9%, 3.8% and 24.1%, increase in 2018 earnings.

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