Melco Resorts Earnings: Melco Returned to Net Profit; Liquidity Profile Improved

We maintain our fair value estimate for Melco Resorts at USD 11.60 per share, following the firm’s in-line first-quarter results, with hold-adjusted EBITDA rising 3% from a quarter ago to USD 314 million, reaching 93% of 2019 level. In addition, the bottom line has also returned to a breakeven level, from a net loss of USD 177 million in the prior quarter. Its liquidity profile improved through a USD 250 million debt reduction and a series of refinancing activities. This helped to mitigate refinancing risk in 2025 and bolster the firm’s financial stability. We keep our earnings forecasts unchanged, and the shares are undervalued currently, in our view. We think Melco is now back on track to restore its competitiveness, following a consolidation of the new management team, and we expect the firm’s strength in the premium mass segment, its leadership in product innovation, and continued its ramp-up at Studio City phase 2 to drive a meaningful market share gain in gross gaming revenue, or GGR, in the longer term.