Melco Resorts & Entertainment (NASDAQ:MLCO) Stock Falls 5.9% - Time to Sell?

Key Points

• Melco Resorts & Entertainment shares fell 5.9% to about $4.22 during mid-day trading, with volume 57% below the average daily level.
• Analyst sentiment is mixed but remains a “Moderate Buy” overall, with an average price target of $7.27; however, several firms recently cut targets or downgraded the stock, including Morgan Stanley and Weiss Ratings.
• The company met quarterly EPS expectations at $0.06, but revenue of $1.25 billion fell short of estimates and declined 5.7% year over year. Melco reported a 4.5% net margin and negative 23.81% return on equity.

Melco Resorts & Entertainment Limited (NASDAQ:MLCO - Get Free Report)'s stock price traded down 5.9% during mid-day trading on Thursday. The stock traded as low as $4.23 and last traded at $4.2150. 921,170 shares changed hands during mid-day trading, a decline of 57% from the average daily volume of 2,161,284 shares. The stock had previously closed at $4.48.

Analyst Upgrades and Downgrades

Several research firms recently weighed in on MLCO. JPMorgan Chase & Co. dropped their price target on Melco Resorts & Entertainment from $6.00 to $5.70 and set a "neutral" rating on the stock in a research report on Thursday, July 16th. Citigroup dropped their target price on shares of Melco Resorts & Entertainment from $10.50 to $9.40 and set a "buy" rating on the stock in a report on Friday, July 10th. Weiss Ratings reiterated a "sell (d)" rating on shares of Melco Resorts & Entertainment in a research note on Tuesday, August 18th. Morgan Stanley cut shares of Melco Resorts & Entertainment from an "overweight" rating to a "negative" rating in a research report on Monday, June 22nd. Finally, Wall Street Zen lowered shares of Melco Resorts & Entertainment from a "buy" rating to a "hold" rating in a research note on Sunday, June 28th. One investment analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating, two have assigned a Hold rating and two have given a Sell rating to the company. According to data from MarketBeat, Melco Resorts & Entertainment has an average rating of "Moderate Buy" and an average target price of $7.27.

Melco Resorts & Entertainment Trading Down 8.7%

The company has a market cap of $1.56 billion, a P/E ratio of 6.86, a PEG ratio of 3.51 and a beta of 0.58. The stock's 50 day moving average is $5.22 and its 200-day moving average is $5.43.

Melco Resorts & Entertainment (NASDAQ:MLCO - Get Free Report) last released its quarterly earnings data on Thursday, August 13th. The company reported $0.06 earnings per share for the quarter, meeting analysts' consensus estimates of $0.06. The business had revenue of $1.25 billion during the quarter, compared to analyst estimates of $1.26 billion. Melco Resorts & Entertainment had a net margin of 4.50% and a negative return on equity of 23.81%. Melco Resorts & Entertainment's revenue was down 5.7% compared to the same quarter last year. During the same period last year, the business earned $0.04 EPS. As a group, sell-side analysts forecast that Melco Resorts & Entertainment Limited will post 0.41 EPS for the current year.

Hedge Funds Weigh In On Melco Resorts & Entertainment

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Parallel Advisors LLC boosted its position in shares of Melco Resorts & Entertainment by 1,370.8% during the first quarter. Parallel Advisors LLC now owns 5,045 shares of the company's stock valued at $29,000 after buying an additional 4,702 shares during the last quarter. GAMMA Investing LLC lifted its stake in Melco Resorts & Entertainment by 71.5% during the 2nd quarter. GAMMA Investing LLC now owns 7,570 shares of the company's stock valued at $40,000 after acquiring an additional 3,155 shares during the period. Hilton Head Capital Partners LLC bought a new position in Melco Resorts & Entertainment during the 4th quarter valued at about $63,000. U S Global Investors Inc. purchased a new stake in shares of Melco Resorts & Entertainment during the 1st quarter valued at about $68,000. Finally, Headlands Technologies LLC purchased a new stake in shares of Melco Resorts & Entertainment during the 2nd quarter valued at about $73,000. 39.62% of the stock is owned by institutional investors.

About Melco Resorts & Entertainment

Melco Resorts & Entertainment Limited is a developer, owner and operator of integrated resort facilities focused on gaming, hospitality and entertainment. The company's properties combine casino operations with hotels, restaurants, retail, convention space and leisure attractions.

Melco operates in Macau, including City of Dreams Macau, Studio City Macau and Altira Macau. Its portfolio also includes City of Dreams Manila in the Philippines and City of Dreams Mediterranean in Cyprus, along with satellite casinos in Cyprus.

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