Las Vegas Sands expanded its buyback authorization to $6 billion while Q2 earnings missed by 24%, and the stock promptly dropped to levels that make the $48.49 average repurchase price look generous. When a company buys back 16% of its float and the stock is still falling, the capital allocation question gets uncomfortable.
Las Vegas Sands posted a quarter that looked ugly on the surface... earnings missed by 30%, stock dropped 5%, and Macau EBITDA fell 24%. But strip out the hold variance and what you find underneath is a company that grew gaming volumes 30-73% while everyone else in the market stayed flat.
Mediolanum cut its Las Vegas Sands position by 53% in Q1, and they weren't alone. With Q2 earnings dropping tomorrow and Macau revenue down 12%, the gap between analyst consensus and actual trading price tells you everything about where institutional confidence stands.
Las Vegas Sands dropped 3% on a day the Dow finished green, yet the company repurchased $740 million of its own stock last quarter at $56.64 per share. When management buys at a 22% premium to today's price, either they're wrong or the market is.
Arizona's state pension trimmed its Las Vegas Sands position by 19% last quarter, and the filing landed like it was news. It wasn't. But what's happening underneath LVS right now actually is worth decomposing.
Las Vegas Sands just posted a quarter that would make any domestic operator's jaw drop... 25% revenue growth, 95.7% occupancy in Singapore, and nearly $800 million in EBITDA from a single property. The part worth studying isn't the gambling. It's the integrated resort model that American hotel companies keep talking about and never actually build.
Las Vegas Sands beat estimates with $3.59 billion in Q1 revenue and $788 million in EBITDA from a single property in Singapore. When one building generates that kind of number, the competitive implications ripple into every luxury and upper-upscale market on the planet.
