Las Vegas Sands Corp. (NYSE:LVS) is set to report FQ4 2013 earnings after the market closes on Wednesday, January 29th. Las Vegas Sands is an American casino and gaming corporation that operates several casinos in the United States and Asia. The Venetian and The Palazzo are among its famous hotels in Las Vegas, while it also owns several properties in Macau. The global casino market has been expanding lately, especially in Macau, which as of August 2013 claimed 6x the gaming revenues of Las Vegas.
One critical area of the gaming industry that Las Vegas Sands is not involved in is online gaming. Recently online gaming has been gaining support for legalization in the United States and online poker is now available in New Jersey. For the time being CEO Sheldon Adelson has kept Las Vegas Sands on the sideline of online gaming due to fear of intense competition and cannibalizing his own brick and mortar casino business. This decision could turnout to be a blown opportunity to increase revenue at a higher profit margin. Here's what the buy side is expecting for Las Vegas Sands this quarter.
The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.
The current Wall Street consensus expectation is for Sands to report 85c EPS and $3.716B revenue while the current Estimize.com consensus from 13 Buy Side and Independent contributing analysts is 84c EPS and $3.710B revenue. This quarter the buy-side as represented by the Estimize.com community is expecting Sands to miss the Street on both profit and revenue by a small margin.
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing a small differential between the 2 groups' forecasts.
Over the past 6 quarters, the consensus from Estimize.com has been more accurate than Wall Street on profit and revenue 4 times each. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors, Estimize has created a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market's actual expectations. It has been confirmed by an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.
The distribution of estimates published by analysts on the Estimize.com platform range from 80c to 89c EPS and $3.661B to $3.735B in revenues. This quarter we're seeing a moderate distribution of estimates compared to previous quarters.
The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution of estimates signaling less agreement in the market, which could mean greater volatility post earnings.
This quarter the Wall Street EPS consensus increased throughout the quarter from 78c to 85c while the Estimize consensus declined from 86c to 84c. Wall Street revenue expectations increased from $3.508B to $3.716B, while the Estimize revenue forecast also pushed higher from $3.691B to $3.710B. Timeliness is correlated with accuracy and in this case both groups are expecting similar earnings numbers at the end of the quarter.
The analyst with the highest estimate confidence rating this quarter is cixoTrades who projects 87c EPS and $3.726B in revenue. In the Winter 2014 season, cixoTrades is rated as the 23rd best analyst and is ranked 19th overall among over 3,650 contributing analysts. Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case the analyst with the highest rated estimate is making a bullish call predicting that Sands will beat the Street on both profit and revenue.
Disclosure: No positions