Can MLCO sustain its earnings momentum into next year?

**Melco Resorts & Entertainment (MLCO) faces challenges in sustaining its earnings momentum into next year.** Here's why: 1. **Recent Performance**: MLCO's most recent quarter showed a net loss of $39.91 million with a diluted EPS of -$0.02, which is a significant decline from the previous year's EPS of $0.54 in Q2 2023. The net income growth rate is 82.4%, but this is largely due to a low base effect from the previous year's losses. |code|Ticker|Name|Date|Total Revenue|Net Income|Diluted EPS|market_code| |---|---|---|---|---|---|---|---| |MLCO|MLCO.O|Melco Resorts & Entertainment|2024 Q1|1.112407E9|550000|0.012|185| |MLCO|MLCO.O|Melco Resorts & Entertainment|2024 Q2|1.159655E9|-1287000|0.016|185| |MLCO|MLCO.O|Melco Resorts & Entertainment|2024 Q3|1.175133E9|1.269E7|0.021|185| |MLCO|MLCO.O|Melco Resorts & Entertainment|2024 Q4|1.191018E9|-3.9912E7|-0.016|185| |code|Ticker|Name|Date|Net Income YoY|Total Revenue YoY|Diluted EPS YoY|market_code| |---|---|---|---|---|---|---|---| |MLCO|MLCO.O|Melco Resorts & Entertainment|2024 Q1|100.54638837285543|55.26002121482805|119.67213114754098|185| |MLCO|MLCO.O|Melco Resorts & Entertainment|2024 Q2|97.48357578601595|22.33434851820634|188.8888888888889|185| |MLCO|MLCO.O|Melco Resorts & Entertainment|2024 Q3|134.48838157358335|15.524544958538755|275|185| |MLCO|MLCO.O|Melco Resorts & Entertainment|2024 Q4|82.39668327967186|8.906715629752023|89.80891719745225|185| 2. **Analyst Expectations**: The consensus rating for MLCO is "Buy" with an average analyst price target of $7.23, indicating a potential upside from the current price. However, this does not guarantee sustained earnings growth. 3. **Market Conditions**: The casino industry is highly dependent on tourism and economic conditions. The company's performance is likely to be influenced by these factors, which can be volatile. 4. **Strategic Investments**: MLCO has been involved in strategic investments, such as the partnership with Y Intercept Hong Kong Ltd, which could shape the future of Asian casino gaming and entertainment. The impact of such investments on short-term earnings is uncertain. 5. **Financial Projections**: MLCO's financial projections for Q2 2024 include an expected EPS of $0.03 and a revenue of $1.16 billion, which represents a significant increase from the previous year. However, beating these expectations will be crucial to sustaining momentum. 6. **Historical Performance**: MLCO has a track record of beating EPS estimates 50% of the time, which is encouraging. However, the company's performance in previous quarters has been inconsistent, which adds uncertainty to future projections. In conclusion, while there are potential positives, such as analyst optimism and strategic investments, the likelihood of MLCO sustaining its earnings momentum into next year is uncertain. The company's ability to manage market conditions, control costs, and meet financial expectations will be critical.