GET DAILY SIGNALSMelco Resorts (MLCO) Reports -10% Revenue Drop in Q3 2026
Key Takeaways
- Melco Resorts reported third quarter 2026 revenue of roughly $1.17 billion, down about 10% from $1.31 billion a year earlier and below consensus estimates.
- Net income attributable to Melco was essentially breakeven, compared with approximately $74.7 million in the prior-year quarter.
- Adjusted Property EBITDA came in at about $288 million, down from around $380 million a year ago.
- City of Dreams Macau drove most of the decline, partly due to unfavorable VIP win rates in the rolling chip segment.
- The company redeemed $765 million of debt, eliminated 2027 maturities, and bought back about $236 million of shares year to date.
- Bright spots came from outside Macau, with City of Dreams Mediterranean posting a record quarter and Manila holding steady.
Why These Results Matter for Investors
Melco Resorts & Entertainment operates some of Macau’s largest integrated resorts, including City of Dreams, Studio City, and Altira Macau, plus properties in the Philippines, Cyprus, and Sri Lanka. Macau still accounts for the bulk of earnings, so the quarter offers a useful read on Chinese consumer spending and regional gaming trends. The results landed against softer gross gaming revenue in Macau, subdued Chinese consumption, and stiff competition. I was interested to see whether cost control, debt paydowns, and buybacks could help offset the softer top line.
The Quarter in Detail
For the three months ended September 30, 2026, total operating revenue reached approximately $1.17 billion, a decline of roughly 10% from $1.31 billion in the same period last year and below analyst expectations. Net income attributable to Melco came in essentially breakeven at about $34,000, compared with roughly $74.7 million a year earlier.
Group-wide Adjusted Property EBITDA totaled about $288 million, or roughly $298 million after VIP hold adjustments, versus around $380 million in the prior-year quarter. Unfavorable VIP win rates at City of Dreams Macau subtracted about $14 million. Revenue at that property fell to approximately $566 million and Adjusted EBITDA dropped to about $130 million. Studio City’s Adjusted EBITDA eased to around $91 million. Outside Macau, City of Dreams Mediterranean achieved its highest quarterly EBITDA since opening, while City of Dreams Manila remained steady at roughly $33 million.
On the balance sheet, the company redeemed $765 million in debt during the quarter, leaving no maturities due in 2027. Share repurchases continued, with about $236 million of American Depositary Shares bought back year to date. Management lowered capital expenditure guidance to approximately $375 million for 2026 and $275 million for 2027.
Market Reaction and Outlook
Shares posted a modestly positive initial move as investors focused on the better-than-guided cost discipline and capital returns despite the weaker revenue. Sentiment stayed cautious after the third straight quarter of Adjusted EBITDA declines, with management calling the Macau environment “challenging” and citing a “perfect storm” of weak Chinese consumption, lingering World Cup effects, and overseas tax issues. October Macau GGR fell roughly 10% year over year. The stock remains well below its 52-week high amid ongoing uncertainty about demand recovery.
Looking forward, attention will turn to whether renewed sales efforts and disciplined reinvestment can help defend share and margins in a softer Macau backdrop. Management noted outperformance versus the broader market in October but tied the softness to the wider Chinese economy. New initiatives include the rebranded REM hotel at City of Dreams Macau, adding about 150 rooms, along with retail and food-and-beverage upgrades rolling out from late 2026 into summer 2027. Deleveraging remains the top priority for free cash flow, with potential dividend resumption eyed toward the end of 2027. Lower capex guidance should support cash flow flexibility. Key items to watch include monthly Macau GGR trends, Chinese consumer spending, and competitive reinvestment levels. Outside Macau, momentum in Cyprus and stability in Manila provide some offset.
Using AI Tools in My Research Process
I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
MLCO's MACD Histogram just turned positive
The Moving Average Convergence Divergence (MACD) for MLCO turned positive on October 30, 2026. Looking at past instances where MLCO's MACD turned positive, the stock continued to rise in 36 of 48 cases over the following month. The odds of a continued upward trend are 75%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on November 02, 2026. You may want to consider a long position or call options on MLCO as a result. In 61 of 84 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 73%.
MLCO moved above its 50-day moving average on November 04, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +14.32% 3-day Advance, the price is estimated to grow further. Considering data from situations where MLCO advanced for three days, in 205 of 282 cases, the price rose further within the following month. The odds of a continued upward trend are 73%.
Bearish Trend Analysis
The RSI Indicator demonstrated that the stock has entered the overbought zone. This may point to a price pull-back soon.
The Stochastic Oscillator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where MLCO declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 81%.
MLCO broke above its upper Bollinger Band on November 04, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for MLCO entered a downward trend on November 03, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Price Growth Rating for this company is 64 (best 1 - 100 worst), indicating fairly steady price growth. MLCO’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of 85 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of 94 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: MLCO's P/B Ratio (204.120) is very high in comparison to the industry average of (14.889). P/E Ratio (7.883) is within average values for comparable stocks, (53.682). Projected Growth (PEG Ratio) (0.349) is also within normal values, averaging (0.784). MLCO's Dividend Yield (0.140) is considerably higher than the industry average of (0.021). P/S Ratio (0.336) is also within normal values, averaging (1.049).
The Tickeron PE Growth Rating for this company is 96 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 100 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. MLCO’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 91, placing this stock worse than average.
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General Information
a provider of casino gaming and entertainment services
Industry HotelsResortsCruiselines
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