Morningstar

The Star Entertainment Group Ltd SGR

Morningstar Rating
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Stock XASX Rating as of
A$0.30 +0.05 (20.00%)
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As of Delayed Price Open

Company Report

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Star Entertainment Earnings: Liquidity Issues Overshadow Fiscal 2024 Results

Angus Hewitt

Looming liquidity concerns delayed no-moat Star Entertainment’s financial results, with the shares suspended from the start of September. But the casino now has breathing room with new debt and associated covenant waivers, buying time to secure a stronger financial position. We cut our fair value estimate 22% to AUD 0.67 per share given weaker earnings forecasts and a likely value-dilutive equity raise.

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Price vs Fair Value

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SGR is trading at a 398% premium.
Price
A$0.25
Fair Value
A$9.53
Uncertainty
Very High
1-Star Price
A$2.72
5-Star Price
A$5.87
Economic Moat
Lqzyv
Capital Allocation
Pqvhd

Bulls Say, Bears Say

Bulls

Despite competition, Star's core Sydney casino provides an opportunity to turn around operations and grow in Australia's most populous market.

Bears

Following inquiries, a more restrictive regulatory regime in Australia appears likely, weakening Star's ability to attract high rollers.

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Trading Information

Previous Close Price
A$0.25
Day Range
A$0.27–0.30
52-Week Range
A$0.21–0.66
Bid/Ask
A$0.30 / A$0.30
Market Cap
A$853.43 Mil
Volume/Avg
37.9 Mil / 16.9 Mil

Key Statistics

Price/Earnings (Normalized)
1.85
Price/Sales
0.38
Dividend Yield (Trailing)
0.00%
Dividend Yield (Forward)
0.00%
Total Yield
—

Company Profile

Star Entertainment Group operates three hotel and casino complexes in Australia: The Star Sydney (license expiring in 2093, with electronic gaming machine exclusivity expiring in 2041), The Star Gold Coast (a perpetual license), and Treasury Casino and Hotel in Brisbane (license expiring in 2070). The Queen's Wharf development in Brisbane will have a 99-year license on completion in 2024 (with a 25-year exclusivity period), replacing the Treasury Casino and Hotel, which will be repurposed into a hotel and retail site.
Sector
Consumer Cyclical
Industry
Resorts & Casinos
Stock Style Box
Small Value
Total Number of Employees
7,809
Website
https://www.starentertainmentgroup.com.au

Competitors

Valuation

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Metric
SGR
SKC
WYNN
Price/Earnings (Normalized)
 1.856.2817.40
Price/Book Value
 0.860.82—
Price/Sales
 0.381.211.54
Price/Cash Flow
 —5.387.16
Price/Earnings
SGR
SKC
WYNN

Financial Strength

Metric
SGR
SKC
WYNN
Quick Ratio
 0.660.251.23
Current Ratio
 0.850.371.30
Interest Coverage
 −11.360.221.46
Quick Ratio
SGR
SKC
WYNN

Profitability

Metric
SGR
SKC
WYNN
Return on Assets (Normalized)
 −5.90%4.36%4.62%
Return on Equity (Normalized)
 −10.16%8.52%—
Return on Invested Capital (Normalized)
 −4.53%4.88%8.96%
Return on Assets
SGR
SKC
WYNN

Resorts & Casinos Industry Comparables

Screen With Investor
1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Las Vegas Sands Corp
LVS
MkldnzkybGvfblj$37.6 Bil
 Galaxy Entertainment Group Ltd ADR
GXYYY
—Jklhmj$21.3 Bil
 Galaxy Entertainment Group Ltd
GXYEF
—Shkxfd$21.3 Bil
 Sands China Ltd Shs Unitary 144A/Reg S
SCHYF
—Myhndlj$19.9 Bil
 Sands China Ltd ADR
SCHYY
—Jpdlkl$19.9 Bil
 MGM Resorts International
MGM
FcpfsmblMdkr$12.0 Bil
 Wynn Resorts Ltd
WYNN
FpdppqyVhvszfk$10.8 Bil
 Caesars Entertainment Inc
CZR
HwtqtkpmlFgmp$9.0 Bil
 Melco Resorts and Entertainment Ltd ADR
MLCO
KbrlqqcgPzrsfr$3.4 Bil
 PENN Entertainment Inc
PENN
YrwfyckWdn$2.9 Bil

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