Is There Now An Opportunity In Las Vegas Sands Corp. (NYSE:LVS)?
Today we're going to take a look at the well-established Las Vegas Sands Corp. (NYSE:LVS). The company's stock saw significant share price movement during recent months on the NYSE, rising to highs of US$52.45 and falling to the lows of US$41.43. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Las Vegas Sands' current trading price of US$42.25 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Las Vegas Sands’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Las Vegas Sands
What Is Las Vegas Sands Worth?
The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that Las Vegas Sands’s ratio of 20.07x is trading slightly above its industry peers’ ratio of 19.29x, which means if you buy Las Vegas Sands today, you’d be paying a relatively sensible price for it. And if you believe Las Vegas Sands should be trading in this range, then there isn’t really any room for the share price grow beyond the levels of other industry peers over the long-term. Although, there may be an opportunity to buy in the future. This is because Las Vegas Sands’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Las Vegas Sands?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 80% over the next couple of years, the future seems bright for Las Vegas Sands. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? It seems like the market has already priced in LVS’s positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at LVS? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?
Are you a potential investor? If you’ve been keeping an eye on LVS, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for LVS, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
If you want to dive deeper into Las Vegas Sands, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for Las Vegas Sands you should know about.
If you are no longer interested in Las Vegas Sands, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com