The results of Macau’s six gaming operators for the fourth quarter ‘should not have many surprises,’ notes Senior Analyst Vitaly Umansky of Seaport Research Partners, showing top-line growth.
But only Galaxy did not see a marginal downward adjustment for price targets amongst Macau operators’ stocks, as IRs were weighed by increased costs and slower growth in Macau and Las Vegas.
According to a Wednesday note, the sector saw a gross gaming revenue (GGR) increase of 15 percent yearly (5.6 percent quarterly) and EBITDA growth of ‘over 15 percent’ in 4Q25. Net revenue growth was about 13.2 percent yearly and 5.9 percent quarterly.
This was partially due to a high VIP hold, tempered by costs and special events (such as the China Games and NBA weekend) and ‘expensive player reinvestment in premium mass’ which ‘did not lead to meaningful margin expansion’.
Of some concern is that ‘overnight base mass remains a weak point in Macau’. For 2025, the main growth seen during the summer period and the fourth quarter was ‘driven largely by the higher-end (both VIP and premium mass)’, as the players saw ‘less constraints on moving money into Macau […] with agency and referral business helping drive growth’. Easier visa protocols and a strong entertainment calendar also helped contribute to the uptick in the year.
Looking ahead, ‘growth should be driven by a combination of increasing visitation and spend (including easy money flows and the benefits accruing from implementation of smart digital tables and increasing spend in side bets),’ furthers Umansky.
Smart table efficiency could ‘be stronger than we expect’, potentially leading to upward revisions. Similarly, baccarat side-betting is now amounting to ‘well over 3 percent’ as a percentage of volume and continues to rise. ‘The casino advantage in side bets is materially higher than traditional baccarat play, and while increasing side bets may reduce overall game time (as players lose money faster), the overall GGR per player would increase,’ highlights the analyst.
For the coming years, Seaport estimates annual growth of about 7 percent in Macau GGR for both 2026 and 2027.
In regards to stocks, those of Macau operators ‘have over corrected singe August’ and currently gaming stock valuations, particularly those of Macau-facing operations still ‘remain largely too low, resulting in a strong risk/reward positioning’.
However, Umansky does note that ‘stock price performance YTD (year- to-date) has been poor, with all stocks in our coverage underperforming and largely showing negative performance. In light of strong fundamentals and low valuations, the weakness has been frustrating and unwarranted’.
Seaport’s top Macau picks include Las Vegas Sands – due to Macau share gains and strength in Singapore, Wynn – due to Wynn Al Marjan Island, and Melco – based on its valuation and deleveraging.
