Is MLCO a Buy? What to Consider in 2026
Last updated July 2026
Short answer
The bull case for Melco Resorts & Entertainment Limited develops (MLCO) rests on Macau mass-market recovery: Macau is the overwhelming driver of Melco's revenue and profit, so the trajectory of Chinese consumer spending, visitation, and premium-mass play is the primary force behind the stock. Revenue (TTM) is ~$5 billion (Q1 2026 operating revenue ~$1.37 billion, up ~11% year on year). If you believe that thesis holds, the real questions become position sizing and overlap, not timing. The main risk to that view: The dominant risk is Macau concentration: the large majority of Melco's revenue and profit comes from a single market, so a weak Chinese consumer, lower visitation, currency moves, or tighter Macau gaming and concession policy can hurt results quickly. Whether MLCO is a buy comes down to whether you believe the thesis. This is informational, not a recommendation, and Walnut is not an investment adviser.
Melco Resorts & Entertainment Limited develops, owns, and operates casino gaming and integrated resort facilities, primarily in Macau. Its Macau portfolio includes City of Dreams, Studio City, Altira Macau, and the Mocha Clubs, and it is one of only six licensed concessionaires in the territory, holding a ten-year gaming concession that runs through 2032. Beyond Macau, Melco operates City of Dreams Manila in the Philippines and City of Dreams Mediterranean in Cyprus, giving it a modest diversification outside Greater China. The company trades on the Nasdaq as an ADR and is controlled by Lawrence Ho and affiliated entities, who hold a majority stake of roughly 58 percent. The investment picture centers almost entirely on Macau. Melco has leaned into the shift toward mass-market and premium-mass gaming rather than the old VIP junket model, and Q1 2026 results showed that focus paying off, with total operating revenue rising about 11 percent year on year and profitability improving. At the same time, the company carries a large debt load built up during the pandemic years and is working to deleverage while funding new projects like the REM luxury hotel in Macau. The stock is a small-cap, high-beta way to play the Chinese consumer and travel recovery, and it swings sharply on Macau visitation trends, gaming regulation, and the pace of debt reduction.
What's the case for buying MLCO?
1. Macau mass-market recovery
Macau is the overwhelming driver of Melco's revenue and profit, so the trajectory of Chinese consumer spending, visitation, and premium-mass play is the primary force behind the stock. Q1 2026 total operating revenue rose about 11 percent to roughly $1.37 billion, with gaming revenue up around 12 percent, reflecting a stronger mass-market environment. A sustained Macau recovery would lift Melco's flagship City of Dreams and Studio City properties directly.
2. Margin expansion and property EBITDA
Melco has emphasized cost discipline and premium-mass mix as it moves past the VIP-junket era, and adjusted property EBITDA reached roughly $381 million in Q1 2026 with expanding margins. Improving property-level cash flow is central to the story because casino operators are valued heavily on EBITDA rather than a simple P/E. Continued margin gains would strengthen the case that the operational rebound is durable rather than a one-quarter blip.
3. Deleveraging and capital returns
Melco built up a large debt load during the pandemic (consolidated gross debt in the range of $7 billion) and is prioritizing debt reduction as cash flow recovers. In April 2026 it also approved a new $500 million share repurchase program, signaling management confidence and a start to returning capital. Progress on lowering leverage while funding growth is a key swing factor for how the equity is valued.
4. New capacity and diversification
Melco is adding the REM luxury hotel in Macau (expected to raise operating expenses in Q3 2026 as it opens) to capture more high-end demand. Outside Macau, City of Dreams Manila and City of Dreams Mediterranean in Cyprus provide smaller revenue streams that are less tied to China. This diversification is limited today but offers optionality if the non-Macau properties scale.
What are the risks to MLCO?
The dominant risk is Macau concentration: the large majority of Melco's revenue and profit comes from a single market, so a weak Chinese consumer, lower visitation, currency moves, or tighter Macau gaming and concession policy can hurt results quickly. The company carries significant debt, so leverage magnifies both gains and losses and constrains flexibility during downturns. Gaming is heavily regulated everywhere Melco operates, and concession or licensing changes are outside its control. Control by Lawrence Ho and affiliated entities (roughly 58 percent) means public ADR holders have limited say in governance and outcomes. The business is cyclical and tied to discretionary travel spending, and the ADR is small-cap and volatile.
How is MLCO valued? (as of JULY 2026)
Snapshot for MLCO as of July 2026, sourced from Yahoo Finance and may be delayed. Valuation figures move with price and earnings; verify the current numbers with your broker before deciding.
- Revenue (TTM): ~$5 billion (Q1 2026 operating revenue ~$1.37 billion, up ~11% year on year)
- Adjusted property EBITDA (Q1 2026): ~$381 million, with expanding margins
- Net income (Q1 2026): ~$77 million, or ~$0.20 per ADS, more than double the prior-year quarter
- Market cap: ~$2.1 billion (small-cap; ADR near ~$5 per share)
- Debt: Consolidated gross debt in the ~$7 billion range; deleveraging underway
- Capital return: New ~$500 million share repurchase program approved April 2026
Figures are approximate and tied to the July 2026 asOf date, so verify live numbers before acting. Casino operators like Melco are typically valued on EBITDA and property-level cash flow rather than a simple P/E, because reported earnings swing with the gaming cycle and the heavy debt load affects net income. A large part of Melco's value is a bet on the continued Macau recovery and on the company reducing leverage over time.
How do you decide if MLCO is a buy?
Rather than asking whether MLCO is a buy in the abstract, it tends to help to answer four questions:
- Thesis: do you believe the case above, and is it still true today?
- Time horizon: a single stock can be volatile, so a longer horizon absorbs more of the swings.
- Position sizing: a thesis can be right and the sizing still wrong; decide how much of your portfolio one name should be.
- Overlap: check whether you already hold MLCO indirectly through an index or sector ETF before adding more.
For the full picture, see the MLCO stock guide (what the company does, the ETFs that hold it, similar stocks, and the themes it fits). In Walnut you can ask its AI about MLCO against your real portfolio and see your actual exposure before deciding.
The bottom line on MLCO
The bottom line: Melco Resorts & Entertainment Limited develops's story right now is Macau mass-market recovery, with revenue (ttm) at ~$5 billion (Q1 2026 operating revenue ~$1.37 billion, up ~11% year on year). If you believe that narrative continues, the call is about sizing MLCO sensibly and checking overlap with what you own; if you doubt it (the risk: the dominant risk is Macau concentration: the large majority of Melco's revenue and profit comes from a single market, so a weak Chinese consumer, lower visitation, currency moves, or tighter Macau gaming and concession policy can hurt results quickly.), it is not for you. Decide from the thesis, not the ticker. Walnut is not an investment adviser.
More on MLCO
- MLCO stock guide (what the company does, ETFs that hold it, similar stocks, and the themes it fits)
- MLCO stock forecast (the drivers and risks shaping the outlook)
- Does MLCO pay a dividend?
Build a basket around MLCO with Walnut
Use Melco Resorts & Entertainment Limited develops as one constituent in a thematic basket Walnut's AI helps you assemble. Describe a thesis you believe in, the AI proposes the holdings and weights, and you approve before any broker order.
FAQ
Is MLCO a good stock to buy right now?
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The case for Melco Resorts & Entertainment Limited develops right now is Macau mass-market recovery, with revenue (ttm) at ~$5 billion (Q1 2026 operating revenue ~$1.37 billion, up ~11% year on year). If you believe that thesis holds, MLCO is a way to own it and the real questions are sizing and overlap, not timing; the main risk to that view is the dominant risk is Macau concentration: the large majority of Melco's revenue and profit comes from a single market, so a weak Chinese consumer, lower visitation, currency moves, or tighter Macau gaming and concession policy can hurt results quickly. So it comes down to whether you believe the thesis. Walnut is not an investment adviser and this is not a recommendation.
What does Melco Resorts & Entertainment Limited develops do?
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Melco Resorts & Entertainment Limited develops, owns, and operates casino gaming and integrated resort facilities, primarily in Macau.
What are the main risks of MLCO?
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The dominant risk is Macau concentration: the large majority of Melco's revenue and profit comes from a single market, so a weak Chinese consumer, lower visitation, currency moves, or tighter Macau gaming and concession policy can hurt results quickly. The company carries significant debt, so leverage magnifies both gains and losses and constrains flexibility during downturns. Gaming is heavily regulated everywhere Melco operates, and concession or licensing changes are outside its control. Control by Lawrence Ho and affiliated entities (roughly 58 percent) means public ADR holders have limited say in governance and outcomes. The business is cyclical and tied to discretionary travel spending, and the ADR is small-cap and volatile.
What does Melco Resorts actually do?
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Melco Resorts & Entertainment develops, owns, and operates casino gaming and integrated resort facilities, combining casinos with hotels, restaurants, retail, and entertainment. Its main properties are City of Dreams, Studio City, Altira, and the Mocha Clubs in Macau, plus City of Dreams Manila in the Philippines and City of Dreams Mediterranean in Cyprus. Macau is by far its largest market.
Where does MLCO trade and what kind of security is it?
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MLCO trades on the Nasdaq as an American depositary share (ADR), so US investors can buy it like any other US-listed stock through a regular brokerage account, including in fractional shares at brokers that support them. The underlying company is incorporated offshore and headquartered in Hong Kong. Each ADS represents ordinary shares of Melco Resorts & Entertainment Limited.
Why is Macau so important to Melco?
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Macau is the world's largest gaming market and the source of the large majority of Melco's revenue and profit, through City of Dreams and Studio City. That means the pace of the Chinese consumer recovery, visitation levels, and Macau's gaming and concession regulations drive Melco's results more than its Philippines or Cyprus properties do. It is why MLCO is often described as a concentrated Macau bet.
How did Melco perform in its most recent quarter?
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In Q1 2026, reported on April 30, 2026, total operating revenue rose about 11 percent year on year to roughly $1.37 billion, gaming revenue climbed about 12 percent, and adjusted property EBITDA reached roughly $381 million with expanding margins. Net income attributable to the company was about $77 million, or roughly $0.20 per ADS, more than double the prior-year quarter. The company also approved a new $500 million buyback.
Walnut is informational and is not an investment adviser. This page is educational and not a recommendation to buy or sell MLCO; figures are approximate and dated, and your own situation, time horizon, and risk tolerance should drive any decision. Verify current data before investing.