Can The Bulls Save Las Vegas Sands Corp. From Falling Farther?
Las Vegas Sands Corp. (NYSE: LVS) has been an ugly duckling of a stock, while the broader market was trading bullishly. Now that the market is getting hit with increased bearishness and volatility, Las Vegas Sands shares seem to be treading water, at least for the time being.
The company has a great deal of uncertainty and concern from an outside/macro standpoint –- growth and geopolitical issues in Asia combined with growth and health concerns in the United States. Those concerns seem to be combining with an ugly technical picture to keep the selling pressure on the stock.
What The Bulls See
- Some reasonable valuation metrics: an enterprise value of $56.51 billion that easily trumps the $49.42 billion market capitalization and a price to sales of 3.38.
- Strong net profit margins of 17.85 percent.
- Positive levered free cash flow of $2.52 billion annually.
- A current ratio of 1.74.
What The Bears See
- A stock that still has farther to fall despite the damage that has already been done.
- Some rich valuation metrics: a price-to-book ratio of 6.89, price-to-earnings of 15 as compared to next year's estimated revenue and earnings growth of 6.8 percent and 11 percent, respectively.
- A relatively high debt-to-equity ratio of 118.77 percent.
Technicians acknowledge that Las Vegas Sands' stock is in a strong downtrend, but they note that support for this third (out of five) wave lower comes in at $56.92 (from $61.24). That Fibonacci-generated number also corresponds with the long-term uptrend line. If Las Vegas Sands closes below that level, the next Fibonacci projection comes in at $52.87. In terms of resistance for the stock, there seems to be horizontal line resistance at $65, $70 and $73.18.
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