Las Vegas Sands (NYSE) is an integrated resorts development company.

One resort that the company typically develops includes accommodations, entertainment, gaming activities, retail and other amenities.

Las Vegas Sands is a major player in Nevada, Macau and Singapore. I’m bearish about the stock. (See Las Vegas Sands stock chart on TipRanks.

Recently Added Performance

With a decline of 34%, the stock ranks among the worst performers on the current year.

Las Vegas Sands has a history of underperforming the S&P 500, but recent performance has been subdued. Lower casino traffic, lower gambling and leverage regulations, as well as COVID-19 travel restrictions, are some of the catalysts.

Earnings and debt concerns

The company released its Q2 financial results in July, where it missed analysts’ revenue estimates by $22 million, due to unexpected Delta pandemic restrictions.

The group’s biggest concern is Nevada casino gamblers who have increased their winning percentage by 20 percent since 2019. For the large developer, it seems like the headwinds don’t seem to be fading.

Las Vegas Sands has now experienced negative 5-year annual growth rates, and revenue is at -11.4%. Assets have also decreased by 17.07% over the past five years, while the company’s levered up by 490.50%, with a negative coverage ratio of -1.8.

Valuation and technicals

At first, I was going to view the stock as an option buy. However, the negative value metrics and debt concerns have made me reconsider. This stock would only be speculation at this time.

Las Vegas Sands’ price to book and price to sales ratios are above the sector average by 276.67% and 417.63%, respectively. Working Capital has grown by 117.25% over the past year due to asset liquidation, and a case could be made for growth through new acquisitions, but headwinds in China mean that the group is likely to spend more on restructuring than acquisitions over the next few years.

Over the past month, the stock’s RSI recovered from the 25 handle to the 50 handle, with many traders buying the pullback. It hasn’t yet slipped below 50. I don’t think there is any momentum, as it trades below its moving averages. 

Wall Street and Hedge Funds

Wall Street disagrees with me. They believe the stock should be a Moderate buy, with an average Las Vegas Sands target price of $53. Stock has been given 5 Hold ratings, 3 Buy ratings, and none Sell ratings.

Hedge funds seem to agree with me a bit more. Hedge Fund outflows were severe in the last quarter with over 1.6 million shares sold. TipRanks Hedge Fund tracker shows there is a very negative consensus among hedge fund managers.

LVS: Final word

Las Vegas Sands had a horrible year. It isn’t likely to improve. Before the stock is considered a pullback purchase, we will have to wait and see how China’s headwinds play out.

Disclosure: Steve Gray Booyens had no position in the securities listed in this article at the time it was published.

Disclaimer: Information in this article does not necessarily reflect those of TipRanks. TipRanks does not warrant the accuracy, reliability or completeness of this information. The article does not constitute a solicitation or recommendation to buy or sell securities. This article is not intended to provide advice on legal, professional investment or financial matters. TipRanks, its affiliates, disclaim any liability or responsibility in relation to the article’s content. You are responsible for your actions based upon the articles. TipRanks and its affiliates do not endorse or recommend this link. The past performance of TipRanks or its affiliates is not an indication of future prices, results, or performances.