The legalization of gambling in several states has not led to the boom in gaming and casino stocks that many were expecting over the long term.
In fact, the exact opposite has taken place for Penn National Gaming (NASDAQ:PENN) and DraftKings Inc. (NASDAQ:DKNG), with both having spectacular rallies that ended in 2021 and have come crashing down.
Wynn Resorts Ltd. (NASDAQ:WYNN) rebounded from its pandemic low to $143.88 — but is now back down at levels not seen since March 2020.
The broad market is attempting to distance itself from its recent low. Yet the gaming issue is struggling to do that in Wednesday’s session following its first-quarter report, making it the PreMarket Prep Stock of the Day.
Street Leans Bearish Into Wynn's Report: Just as the broad market has been under selling pressure over the last few weeks, so has Wynn Resorts. In fact, five sessions ago, the issue closed at $71.96. On Tuesday, the issue ended the session at $61.65 for a decline of 14%.
Wynn's Q1 Report: After the close on Tuesday, the company reported quarterly losses of $1.21 per share, which missed the analyst consensus estimate of a $1.15 loss by 5.22%. This is 49.79% worse than losses of $2.41 per share from the same period last year.
The company reported quarterly sales of $953.3 million, which missed the analyst consensus estimate of $986.36 million by 3.35%. This is a 31.35% increase over sales of $725.78 million in the same period last year.
WYNN Price Action: Following a slightly higher open Wednesday, the issue caught a bid with the broad market. It found resistance ahead of Tuesday’s high ($63.41), only reaching $63, and sharply reversed course. It has continued to make new lows for the session, with the most recent being at $58.90.
The stock was down 3.88% at $59.26 Wednesday afternoon.
Wynn Moving Forward: It's hard to be bullish on an issue that is making a new low for the move, which happens to be a two-year low. In addition, with Wynn just having releases its earnings report and likely no analyst upgrades on the horizon, what will be the catalyst to turn Wynn around?
Based on the daily and weekly charts, the next low is not until Wynn's April 6, 2020 low of $52.75. Based on the monthly charts, its monthly low in April 2020 was $46.21.
