MLCO Should I Buy
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Melco Resorts & Entertainment Ltd (MLCO) is not a strong buy for a beginner investor with a long-term strategy at this moment. While the stock has potential upside due to positive catalysts like Macau's gaming revenue growth and asset enhancements, the recent financial performance, bearish technical indicators, and lack of strong proprietary trading signals suggest holding off on immediate investment.
The MACD is positive and expanding, indicating some bullish momentum. However, the RSI is neutral, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading near its pivot level of $5.894, with key support at $5.395 and resistance at $6.392. Overall, the technical indicators suggest a cautious approach.
UBS upgrade to Buy with a price target of $9.50, citing asset enhancements and robust free cash flow projections for 2026-
Positive sentiment around Macau's gaming revenue growth and increased visitation during the Chinese New Year.
Improved gross margin in Q4 2025 (+5.23% YoY).
Recent Q4 2025 financials showed a significant drop in net income (-399.08% YoY) and EPS (-350% YoY).
Concerns over margin pressure, trademark license fee hikes, and market share losses.
Stock trend analysis indicates a high probability of short-term declines (-2.73% next day, -22.49% next month).
In Q4 2025, revenue increased by 8.59% YoY to $1.29B, but net income dropped significantly by -399.08% YoY to $60.64M. EPS also fell by -350% YoY to $0.05. Gross margin improved slightly to 25.17% (+5.23% YoY), indicating some operational efficiency.
Analysts are generally optimistic, with multiple Buy ratings and price targets ranging from $9.50 to $11.50. UBS and Citi highlight the company's asset enhancements and potential for robust free cash flow. However, concerns over margin pressure and market share losses temper the optimism.
