10 Most Undervalued Hotel Stocks To Invest In Now

2. Melco Resorts & Entertainment Limited (NASDAQ:MLCO)

Forward P/E: 15.87

Analysts’ Upside Potential: 42.96%

Melco Resorts & Entertainment Limited (NASDAQ:MLCO) is a Hong Kong-based company that ranks among the most undervalued hotel stocks. The company develops, owns, and operates casino resorts and hotels in Macau, the Philippines, and other locations.

The company manages several key properties, such as City of Dreams and Altira Macau in Macau, City of Dreams Manila in the Philippines, and City of Dreams Mediterranean in Limassol in the Republic of Cyprus. Additionally, Melco Resorts & Entertainment Limited (NASDAQ:MLCO) operates three satellite casinos in Cyprus.

In the third quarter of 2024, Melco Resorts & Entertainment Limited (NASDAQ:MLCO) reported total operating revenues of $1.18 billion, an increase of 16% year-over-year. This growth is largely due to improved performance across all segments, driven by a recovery in tourism to Macau.

Melco Resorts & Entertainment Limited (NASDAQ:MLCO) is actively enhancing its properties to attract more visitors. In September, the company launched a revamped loyalty program aimed at premium customers, which is already showing positive results. In the Q3 2024 earnings call, management shared that the company has also opened new gaming areas at its resorts, such as a new signature premium slot area at City of Dreams and the Dragon Zone at Studio City.

To improve accessibility across its properties, Melco Resorts & Entertainment Limited (NASDAQ:MLCO) is making upgrades to its entrances and installing interactive LED screens to engage guests. The installation of RFID technology for gaming tables is also progressing well, with plans to complete it at City of Dreams by early 2025.

In October, the company opened the City of Dreams Sri Lanka, which includes the 687 key Cinnamon Life hotel. Looking ahead, Melco Resorts & Entertainment Limited (NASDAQ:MLCO) has a strong pipeline of projects for 2025, including enhancements to customer flow at City of Dreams and the relaunch of the popular House of Dancing Water show.

With its strong financial performance and strategic initiatives aimed at growth, Melco Resorts & Entertainment Limited (NASDAQ:MLCO) presents a compelling investment opportunity for those interested in hotel and casino stocks. Analysts are also bullish on MLCO. The 12-month median price target set by analysts indicates a potential upside of 42% from the current stock price.