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MGM Resorts (MGM)
NYSE:MGM
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MGM Resorts
(NYSE:MGM)65Neutral
Positive Factors
Regional and Las Vegas Operations
Improvement in MGM's Regional properties and Las Vegas Strip operations positions the company to benefit from strong demand.
Stock Buybacks
MGM is aggressively repurchasing stock, which could help address its undervaluation in the market.
Negative Factors
Earnings
MGM reported adjusted 4Q24 EPS of $0.45, down from $1.06 in the prior-year period, indicating a decrease in earnings.
MGM Resorts (MGM) vs. S&P 500 (SPY)
Market Cap
$9.31B
Dividend YieldN/A
Average Volume (3M)5.17M
Price to Earnings (P/E)13.6
Beta (1Y)1.72
Revenue Growth6.66%
EPS Growth-24.59%
CountryUS
Employees76,000
SectorConsumer Cyclical
Sector Strength53
IndustryHotels, Lodging & Leisure
Share Statistics
EPS (TTM)2.39
Shares Outstanding285,550,600
10 Day Avg. Volume4,548,984
30 Day Avg. Volume5,169,197
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.55
Price to Cash Flow (P/CF)3.50
P/FCF Ratio3.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$48.83Price Target Upside49.74% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering17
MGM Resorts Business Overview & Revenue Model
Company DescriptionMGM Resorts International is a global hospitality and entertainment company headquartered in Las Vegas, Nevada. The company operates a portfolio of destination resort brands including Bellagio, MGM Grand, Mandalay Bay, and The Mirage, among others. MGM Resorts offers a wide range of amenities such as luxury hotels, state-of-the-art casinos, world-class dining, entertainment experiences, and meeting and convention facilities.
How the Company Makes MoneyMGM Resorts makes money primarily through its operations in the hospitality and entertainment sectors. The company generates revenue from its hotel accommodations, casino gaming, food and beverage services, and entertainment offerings. Room bookings and related services provide significant income, while the casino segment contributes a substantial portion through gaming activities including table games, slot machines, and sports betting. Additionally, MGM Resorts earns from conventions and event hosting, leveraging its large-scale facilities and prime locations. Partnerships with entertainment companies and celebrity chefs also enhance its revenue streams by attracting visitors seeking high-profile experiences.
MGM Resorts Financial Statement Overview
Summary
MGM Resorts showcases robust revenue growth and a strong operating cash flow, yet faces challenges with declining profitability margins and high leverage. The company's financial position is solid but requires careful management of debt to sustain long-term growth.Income Statement
MGM Resorts has demonstrated strong growth in its revenue, with a year-over-year increase of 6.65% from 2023 to 2024. The company also maintains a healthy gross profit margin of 100% in 2024. However, there is a notable decline in EBIT and EBITDA margins compared to the previous year, and net profit margin has decreased from 7.07% to 4.33%, indicating pressure on the company's profitability.78
Positive
Balance Sheet
The balance sheet shows a high debt-to-equity ratio of 8.60 in 2024, indicating significant leverage, which could pose financial risks. The equity ratio has decreased to 7.31%, suggesting lower financial stability. Return on equity has also declined to 24.69%, reflecting reduced profitability on shareholder investments.65
Positive
Cash Flow
MGM Resorts' cash flow statement highlights a decrease in free cash flow from 2023 to 2024, although free cash flow remains positive at $1.21 billion. The operating cash flow to net income ratio is strong at 3.16, indicating effective cash generation relative to net income.72
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 17.24B | 16.16B | 13.13B | 9.68B | 5.16B | Gross Profit |
| 7.85B | 7.61B | 6.47B | 4.65B | 1.71B | EBIT |
| 1.49B | 1.89B | -1.81B | 631.33M | -2.08B | EBITDA |
| 2.39B | 2.75B | 1.77B | 1.71B | 558.86M | Net Income Common Stockholders |
| 746.56M | 1.14B | 206.73M | 1.25B | -1.32B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.42B | 2.93B | 5.91B | 4.70B | 5.10B | Total Assets |
| 42.23B | 42.37B | 45.69B | 40.90B | 36.49B | Total Debt |
| 25.99B | 31.62B | 33.87B | 24.57B | 20.77B | Net Debt |
| 23.57B | 28.69B | 27.96B | 19.87B | 15.67B | Total Liabilities |
| 38.51B | 38.00B | 40.32B | 29.77B | 25.25B | Stockholders Equity |
| 3.02B | 3.81B | 4.83B | 6.07B | 6.50B |
| Cash Flow | Free Cash Flow | |||
| 1.21B | 1.76B | 991.39M | 882.73M | -1.76B | Operating Cash Flow |
| 2.36B | 2.69B | 1.76B | 1.37B | -1.49B | Investing Cash Flow |
| -1.28B | -714.17M | 2.12B | 1.54B | 2.16B | Financing Cash Flow |
| -1.56B | -5.00B | -3.02B | -2.81B | 2.10B |
MGM Resorts Technical Analysis
Negative
32.61
Price Trends
34.47
Negative
36.34
Negative
38.15
Negative
Market Momentum
-0.18
Positive
36.75
Neutral
8.36
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MGM, the sentiment is Negative. The current price of 32.61 is below the 20-day moving average (MA) of 35.70, below the 50-day MA of 34.47, and below the 200-day MA of 38.15, indicating a bearish trend. The MACD of -0.18 indicates Positive momentum. The RSI at 36.75 is Neutral, neither overbought nor oversold. The STOCH value of 8.36 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MGM.
MGM Resorts Risk Analysis
MGM Resorts disclosed 32 risk factors in its most recent earnings report. MGM Resorts reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
MGM Resorts Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $9.50B | 20.52 | -51.73% | 1.12% | 9.13% | -30.00% | |
65 Neutral | $9.31B | 13.64 | 24.69% | ― | 6.66% | -24.59% | |
60 Neutral | $8.72B | 20.86 | 39.39% | 0.35% | 11.07% | 3.32% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
49 Neutral | $7.04B | ― | -6.35% | ― | -2.45% | -135.17% | |
48 Neutral | $3.29B | ― | -10.88% | ― | 3.38% | 38.18% |
* Consumer Cyclical Sector Average
Performance Comparison
MGM
MGM Resorts
32.61
-9.38
-22.34%
CHDN
Churchill Downs
112.70
0.96
0.86%
PENN
Penn National Gaming
19.75
2.22
12.66%
WYNN
Wynn Resorts
87.10
-11.55
-11.71%
CZR
Caesars Entertainment
30.73
-10.35
-25.19%
MGM Resorts Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -5.12% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with record-breaking performance in several key areas, including Las Vegas operations and BetMGM growth. However, challenges such as the impact of the Super Bowl headwind, ongoing digital losses, and revenue declines in Las Vegas were noted. Overall, the sentiment is cautiously optimistic with an expectation of growth in 2025.Highlights
Record-Breaking Performance
MGM Resorts achieved record results in consolidated net revenues, domestic slot win, hotel revenue, and F&B revenue for 2024.
Strong Start to 2025
January 2025 showed positive indicators with increased domestic operations revenue and ADRs expected to grow throughout the year.
Las Vegas Operations
Las Vegas December slot handle and slot win reached all-time records, contributing to a strong fourth quarter performance.
Convention Bookings Surge
MGM Resorts recorded the strongest convention booking month in December, with bookings 43% higher than the prior record month.
BetMGM Performance
BetMGM drove over $2 billion in top-line growth, with expectations for 2025 net revenues from operations to reach $2.4 billion to $2.5 billion.
MGM China Success
MGM China achieved the best ever full-year segment adjusted EBITDA, with a market share growing to over 16% in December.
Lowlights
Impact of Super Bowl and Renovations
The comparison to the prior year's Super Bowl is expected to have a $65 million year-over-year headwind, with additional impacts from MGM Grand renovations.
MGM Digital Losses
Despite revenue growth, MGM Digital's 2025 EBITDAR losses are expected to stay consistent with 2024 due to increased spending related to the launch in Brazil.
Las Vegas Revenue Decline
Las Vegas revenues were down 6% and adjusted EBITDAR was down 11% in the fourth quarter, facing strong comparisons to the prior year.
Company Guidance
During MGM Resorts International's fourth quarter and full year 2024 earnings call, the company provided guidance for the upcoming year. CEO Bill Hornbuckle highlighted the company's strong financial position, noting record annual domestic slot win, hotel revenue, and food and beverage revenue. MGM's Net Promoter Scores also reached an all-time high for Gold+ customers. The company expects continued growth in 2025, with revenues from domestic operations up in January and ADRs projected to grow throughout the year. MGM's balance sheet is characterized by low net debt and significant liquidity, allowing for strategic investments and expansion in both digital and brick-and-mortar platforms. The company is optimistic about achieving $2.4 to $2.5 billion in net revenues from operations for BetMGM in 2025, with EBITDA turning positive, representing a $250 million year-over-year increase. Additionally, MGM is focusing on enhancing the customer experience through investments in property renovations and expanding its digital footprint, particularly in Europe and Brazil. MGM aims to leverage its strong market position in Las Vegas and other key markets to drive sustained growth and shareholder value.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.