Over the past six months, Wynn Resorts’s shares (currently trading at $83.10) have posted a disappointing 18.6% loss while the S&P 500 was down 1.7%. This may have investors wondering how to approach the situation.

Is now the time to buy Wynn Resorts, or should you be careful about including it in your portfolio? Get the full breakdown from our expert analysts, it’s free .

Despite the more favorable entry price, we're sitting this one out for now. Here are three reasons why there are better opportunities than WYNN and a stock we'd rather own.

Why Is Wynn Resorts Not Exciting?

Founded by the former Mirage Resorts CEO, Wynn Resorts (NASDAQ:WYNN) is a global developer and operator of high-end hotels and casinos, known for its luxurious properties and premium guest services.

1. Long-Term Revenue Growth Disappoints

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Regrettably, Wynn Resorts’s sales grew at a weak 1.5% compounded annual growth rate over the last five years. This was below our standards.

2. Projected Revenue Growth Shows Limited Upside

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Wynn Resorts’s revenue to stall, a deceleration versus its 37.7% annualized growth for the past two years. This projection doesn't excite us and suggests its products and services will face some demand challenges.

3. Previous Growth Initiatives Haven’t Impressed

Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Wynn Resorts historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 1.6%, lower than the typical cost of capital (how much it costs to raise money) for consumer discretionary companies.

Final Judgment

Wynn Resorts isn’t a terrible business, but it isn’t one of our picks. After the recent drawdown, the stock trades at 17.6× forward price-to-earnings (or $83.10 per share). While this valuation is reasonable, we don’t really see a big opportunity at the moment. We're pretty confident there are more exciting stocks to buy at the moment. We’d recommend looking at our favorite semiconductor picks and shovels play .

Stocks We Like More Than Wynn Resorts

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