Hook & thesis
Wynn Resorts is not a volume play — it is a premium play. The company runs destination properties that command higher spend per customer and generate durable free cash flow. At roughly $116 a share today, Wynn offers exposure to luxury leisure demand, an accelerating development pipeline (notably a $5.1 billion Al Marjan Island resort), and what looks like reasonable valuation metrics for a high-quality operator.
Our trade thesis: buy WYNN at or near the current price for a multi-month hold (up to 180 trading days). The combination of steady FCF (about $737 million last reported), an EV/EBITDA around 11.4x, improving macro dynamics that favor leisure, and visible new-asset optionality justify a constructive stance. We size this as a medium-risk, long-term trade with a clear stop and target to manage event risk around openings and macro shifts.
What Wynn does and why it matters
Wynn Resorts is a designer, developer, and operator of destination casino resorts. Its portfolio is concentrated in high-margin assets: Wynn Palace and Wynn Macau in Asia, Las Vegas operations domestically, and Encore Boston Harbor. The company’s model leans on premium guests who pay more for rooms, F&B, VIP gaming, and integrated resort experiences — that mix produces higher-than-average revenue per visit and stronger free cash flow conversion versus mass-market operators.
Why the market should care now
Three structural reasons make Wynn interesting today:
- Premium positioning - The resorts are positioned at the luxury end of the spectrum, which supports pricing power when consumer confidence is stable and supply of new premium rooms is limited.
- Attractive cash generation - Free cash flow was about $737 million, and enterprise value is roughly $21.1 billion, translating to an EV/FCF profile that supports reinvestment and shareholder returns.
- Growth optionality - The Al Marjan Island project in Ras Al Khaimah (UAE) is a $5.1 billion resort expected to open in early 2027. New high-end capacity, if managed conservatively, can re-rate multiples as earnings and FCF flow from the development.
Key numbers the thesis rests on
| Metric | Value |
|---|---|
| Current price | $116.31 |
| Market cap | $12.20B |
| Enterprise value | $21.08B |
| EV/EBITDA | 11.37x |
| Free cash flow (most recent) | $737.24M |
| Price / Free Cash Flow | ~16.13x |
| 52-week range | $65.25 - $134.72 |
| Dividend: ex-dividend | 02/23/2026 (payable 03/04/2026) |
Valuation framing
At a market cap near $12.2 billion and enterprise value of $21.1 billion, Wynn trades at roughly 11.4x EV/EBITDA and about 16x price-to-free-cash-flow. For a luxury-focused operator with strong FCF and a defined development pipeline, that multiple is reasonable. The stock is not cheap on headline earnings multiples, but the premium brand, limited direct competition at the ultra-luxury level, and high per-guest economics justify a multiple above commodity leisure peers.
Put differently: investors are paying for asset quality and earnings durability rather than a cyclical discount. If the Al Marjan project and steady FCF conversion prove additive to earnings, a re-rating toward mid-teens EV/EBITDA is plausible over the next year, which underpins our target.
Catalysts to watch (2-5)
- Al Marjan Island progress and early 2027 opening - positive construction milestones or pre-sales/partner announcements would materially de-risk the $5.1B development.
- Macro tailwinds - softer inflation and clearer Fed easing expectations improve leisure discretionary spending and increase REVPAR and gaming volumes.
- Analyst revisits and upgrades - several banks have been bullish; any sustained positive revisions to forecasts could accelerate flows.
- Quarterly FCF and margin improvement - consistent beat-and-raise results on operating margins and FCF conversion will drive re-rating.
Technicals and market structure
Price sits above the 10- and 20-day SMAs (~$114.66 and $113.25) and just below the 50-day SMA (~$118.35). Momentum indicators are neutral-to-constructive: RSI around 52 and MACD showing bullish momentum. Short interest rounds to low single-digit days to cover (recently ~4 days) but short-volume spikes suggest episodic bearish flow that can amplify moves in either direction.
Trade plan (actionable)
Entry: Buy WYNN at $116.31.
Stop loss: $104.00 - a level below recent short-term support and comfortably under the 50-day average, providing room for intraday volatility while protecting against a larger breakdown.
Target: $150.00 - based on a re-rating toward mid-teens EV/EBITDA as FCF and new-asset contributions become clearer; hitting $150 implies upside of ~29% from entry.
Horizon: long term (180 trading days). Expect this trade to play out over several quarters as the Al Marjan project approaches delivery and as leisure demand normalizes into a Fed easing cycle. We would consider scaling out earlier in the mid term (45 trading days) if catalysts accelerate (e.g., an analyst upgrade or a stronger-than-expected quarterly FCF beat).
Why these levels?
The entry is the current market price keyed to near-term support and constructive momentum. The stop at $104 limits downside to a point where the stock would likely have broken key technical support and signaled a change in underlying demand. The $150 target prices in a scenario where Wynn’s earnings mix shifts positively (higher margins, stable VIP volumes, and incremental EBITDA from new assets), combined with multiple expansion toward ~14-16x EV/EBITDA.
Risks and counterarguments
- Macro cyclicality: Leisure and gambling are discretionary. An economic slowdown or faster-than-expected rate hikes could materially reduce REVPAR and gaming spend.
- Execution risk on Al Marjan: Large resort developments carry schedule and cost risk. Any meaningful delay or cost overrun would compress returns and pressure the stock.
- Geographic concentration in Asia: Wynn Macau remains a large profit center and is sensitive to regional travel patterns and regulatory changes.
- Short selling pressure and volatility: Elevated short-volume readings show the stock can experience sharp down moves on negative news or macro shocks.
- Competition and pricing: Premium positioning helps, but competition from other luxury entrants or supply additions in targeted markets could blunt pricing power.
Counterargument: The bear case is that Wynn is too close to a cyclical peak in leisure spending, and valuation does not provide a meaningful margin of safety if FCF falls sharply. Under that view, waits for a deeper pullback below the 50% retracement zone or a multiple compression event would be preferred. That is reasonable; our thesis assumes FCF holds near current run-rate and that new-asset growth offsets normalizing margins.
What would change my mind
I would downgrade this trade if any of the following occur: (a) clear delays or material budget overruns on the Al Marjan Island project, (b) a sustained breakdown below $104 on rising volume indicating structural demand loss, (c) macro indicators show a renewed sharp contraction in discretionary spending, or (d) quarterly FCF falls materially below the recent $737 million run-rate without signs of rebound.
Conclusion
Wynn Resorts is a quality, premium operator with the balance-sheet and cash generation to fund growth and return capital. At an EV/EBITDA of roughly 11.4x and with near-term development optionality, the reward-risk profile favors a long position for investors willing to hold through event and macro noise. Buy WYNN at $116.31 with a $104 stop and a $150 target over a 180-trading-day horizon, but remain alert for project execution risk and macro downside that would force reassessment.
Trade checklist: entry $116.31 / stop $104.00 / target $150.00 - horizon: long term (180 trading days).