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MGM Resorts (MGM)
NYSE:MGM

MGM Resorts (MGM) AI Stock Analysis

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MGM Resorts

(NYSE:MGM)

Rating:68Neutral
Price Target:
$34.00
▲(8.66%Upside)
MGM's overall stock score reflects strong operational efficiency and positive strategic initiatives discussed in the earnings call, despite high leverage and stagnant revenue growth. The technical analysis shows mixed signals, but valuation remains reasonable.
Positive Factors
Market Momentum
Las Vegas momentum remains positive, despite macro concerns.
Operational Performance
Solid performance in other segments, including Macau and Digital, coupled with the repurchase activity should further support upside in the shares.
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.
Revenue Trends
Las Vegas 4Q24 revenue saw a 6% decrease from 4Q23, reflecting tough comparisons to the previous year's strong results.

MGM Resorts (MGM) vs. SPDR S&P 500 ETF (SPY)

MGM Resorts Business Overview & Revenue Model

Company DescriptionMGM Resorts International is a global hospitality and entertainment company renowned for its premier destination resorts. These resorts offer a wide array of amenities, including world-class hotels, casinos, dining, entertainment, and meeting spaces. The company operates predominantly in the United States, with properties in Las Vegas, Detroit, and other major cities, as well as international locations such as Macau. MGM Resorts is known for its iconic properties like MGM Grand, Bellagio, and Mandalay Bay, which attract millions of visitors annually.
How the Company Makes MoneyMGM Resorts generates revenue primarily through its casino operations, which include gaming tables, slot machines, and sports betting. Additionally, the company earns substantial income from its hotel accommodations, which offer luxury stays and unique experiences. Food and beverage sales from its numerous restaurants and bars across its properties also contribute significantly to its revenue. Furthermore, MGM Resorts makes money through entertainment offerings, including concerts, shows, and events hosted in its venues. Another key revenue stream is its convention and meeting facilities, which attract business travelers and large conferences. The company also benefits from partnerships and joint ventures, such as its stake in BetMGM, a leading sports betting and online gaming platform. These diversified revenue streams enable MGM Resorts to capitalize on various aspects of the hospitality and entertainment industry.

MGM Resorts Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: -0.54%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong performance in digital and loyalty programs, a successful partnership with Marriott, and share repurchases. Challenges were noted in the Las Vegas segment due to specific events and regional weather impacts. Overall, the highlights, particularly the BetMGM turnaround and Marriott partnership, outweigh the lowlights.
Q1-2025 Updates
Positive Updates
BetMGM Turnaround
BetMGM reported an increase in net revenue from operations of 34% for the quarter and EBITDA of $22 million, a major improvement of over $150 million from the prior year period.
MGM Rewards Program Milestone
MGM Rewards program crossed 50 million members, representing growth of over 50% since 2020.
Marriott Partnership Success
The partnership with Marriott accounted for 900,000 room nights this year, up from 660,000 last year, aiding record first quarter occupancy.
MGM China Performance
MGM China maintained a mid-teens share, ending the quarter at 15.7%, with margins holding at 28% due to strong operational control.
Share Repurchase Program
14.7 million shares were repurchased for $494 million in Q1, with an additional $215 million in Q2, reflecting confidence in stock value.
Negative Updates
Las Vegas Segment EBITDA Decline
Las Vegas segment adjusted EBITDA was down $17 million, influenced by a $65 million year-over-year impact related to the Super Bowl and room remodels.
Regional Operations Weather Impact
Regional properties experienced a modest revenue decline due to challenging weather at the start of the quarter.
Macau Tariff Concerns
While current impacts are minimal, there is ongoing monitoring of potential negative impacts from tariffs on operations and costs.
Company Guidance
During the first quarter of 2025, MGM Resorts International reported strong financial results, bolstered by various key achievements and strategic initiatives. The MGM Rewards program experienced significant growth, surpassing 50 million members, marking a 50% increase since 2020. The company also highlighted a robust performance in Las Vegas, achieving record first-quarter occupancy and slot win, despite a challenging year-over-year Super Bowl comparison. Additionally, BetMGM reported a notable improvement, with net revenue from operations increasing by 34% and EBITDA reaching $22 million, a substantial turnaround from the previous year. MGM China maintained a 15.7% market share and announced plans to open new villas and suites. Furthermore, the Marriott partnership is expected to account for 900,000 room nights in 2025, up from 660,000 in 2024. With a $200 million EBITDA enhancement plan underway and a strong balance sheet, MGM Resorts is well-positioned for continued growth and investment opportunities, including developments in Japan and potential expansion in New York.

MGM Resorts Financial Statement Overview

Summary
MGM Resorts demonstrates strong operational efficiency with solid profit margins and cash flow generation. However, high leverage and stagnant revenue growth indicate potential financial risks, suggesting a need for balance sheet strengthening.
Income Statement
70
Positive
MGM Resorts shows solid performance with a positive gross profit margin of 57.8% for TTM, indicating efficient revenue generation. Net profit margin improved to 4.9%, reflecting better cost control. However, revenue growth is slightly negative at -0.6% compared to the previous year, indicating a need for top-line expansion. EBIT and EBITDA margins remain stable at 8.6% and 13.0%, respectively, showcasing operational efficiency with a need for increased revenue growth.
Balance Sheet
60
Neutral
The balance sheet shows high leverage with a debt-to-equity ratio of 9.07, pointing to significant reliance on debt. Return on equity stands at a modest 29.3%, indicating decent profitability relative to equity. The equity ratio is a low 6.95%, highlighting potential risk due to high liabilities. Strengthening equity and reducing debt could improve financial stability.
Cash Flow
75
Positive
MGM's cash flow is robust with a healthy operating cash flow to net income ratio of 2.81, indicating strong cash generation relative to earnings. Free cash flow to net income ratio is solid at 1.36, ensuring sufficient cash to cover investments. However, free cash flow growth is negative at -6.05%, suggesting a drop in cash available for expansion.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
17.13B17.24B16.16B13.13B9.68B5.16B
Gross Profit
7.59B7.85B7.61B6.47B4.65B1.71B
EBIT
1.47B1.49B1.89B-1.81B631.33M-2.08B
EBITDA
2.44B2.39B2.75B1.77B1.71B558.86M
Net Income Common Stockholders
677.64M746.56M1.14B206.73M1.25B-1.32B
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.72B2.42B2.93B5.91B4.70B5.10B
Total Assets
42.08B42.23B42.37B45.69B40.90B36.49B
Total Debt
31.39B31.61B31.62B33.99B24.69B21.02B
Net Debt
28.66B29.19B28.69B28.08B19.99B15.92B
Total Liabilities
38.02B38.51B38.00B40.32B29.77B25.25B
Stockholders Equity
3.46B3.02B3.81B4.83B6.07B6.50B
Cash FlowFree Cash Flow
1.14B1.21B1.76B991.39M882.73M-1.76B
Operating Cash Flow
2.35B2.36B2.69B1.76B1.37B-1.49B
Investing Cash Flow
-1.40B-1.28B-714.17M2.12B1.54B2.16B
Financing Cash Flow
-1.42B-1.56B-5.00B-3.02B-2.81B2.10B

MGM Resorts Technical Analysis

Technical Analysis Sentiment
Negative
Last Price31.29
Price Trends
50DMA
31.09
Positive
100DMA
32.47
Negative
200DMA
34.93
Negative
Market Momentum
MACD
-0.06
Positive
RSI
45.02
Neutral
STOCH
65.81
Neutral
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 31.29 is below the 20-day moving average (MA) of 32.59, above the 50-day MA of 31.09, and below the 200-day MA of 34.93, indicating a neutral trend. The MACD of -0.06 indicates Positive momentum. The RSI at 45.02 is Neutral, neither overbought nor oversold. The STOCH value of 65.81 is Neutral, 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 33 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 1 New Risks
1.
Our operational efforts to expand our digital business in new geographic markets may not be successful. Q4, 2024

MGM Resorts Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
BYBYD
78
Outperform
$6.00B11.9735.62%0.94%6.06%10.05%
HH
71
Outperform
$12.50B16.8422.31%0.46%-7.38%19.62%
MGMGM
68
Neutral
$8.71B14.0221.38%2.76%-14.31%
WHWH
67
Neutral
$6.29B19.4153.31%1.90%4.79%48.48%
62
Neutral
$6.94B11.292.95%3.87%2.70%-24.49%
59
Neutral
$9.17B23.95-51.73%1.16%-0.08%-48.66%
CZCZR
59
Neutral
$5.50B-5.56%-1.25%-130.83%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MGM
MGM Resorts
31.29
-9.40
-23.10%
BYD
Boyd Gaming
73.27
20.83
39.72%
H
Hyatt Hotels
129.96
-14.58
-10.09%
WYNN
Wynn Resorts
83.24
-8.85
-9.61%
CZR
Caesars Entertainment
25.63
-10.43
-28.92%
WH
Wyndham Hotels & Resorts
81.66
11.81
16.91%

MGM Resorts Corporate Events

Executive/Board ChangesShareholder Meetings
MGM Resorts Confirms Board and Auditor at Annual Meeting
Neutral
May 9, 2025

On May 7, 2025, MGM Resorts International held its annual meeting of stockholders where key proposals were voted on. The election of the Board of Directors was confirmed with all nominees receiving a majority of votes. Additionally, Deloitte & Touche LLP was ratified as the independent registered public accounting firm for 2025, and the compensation of the company’s named executive officers was approved.

Executive/Board ChangesBusiness Operations and Strategy
MGM Resorts Extends CEO Hornbuckle’s Contract to 2028
Positive
May 8, 2025

On May 8, 2025, MGM Resorts International extended its employment agreement with CEO William Hornbuckle until December 31, 2028, ensuring his leadership for the long term. The agreement includes a base salary of $2 million per year, annual bonuses, equity grants, and a special signing bonus, reflecting the company’s commitment to stability and strategic leadership. This move is expected to strengthen MGM’s industry positioning and provide continuity in its operations, particularly with the upcoming Japan Integrated Resort project.

Executive/Board ChangesBusiness Operations and Strategy
MGM Resorts Appoints Dame Donna Langley to Board
Positive
Mar 12, 2025

On March 12, 2025, MGM Resorts International appointed Dame Donna Langley, Chairman of NBCUniversal Entertainment & Studios, to its Board of Directors, expanding the board to 13 members. Langley’s extensive experience in entertainment programming and marketing is expected to significantly benefit MGM Resorts as it aims to enhance its gaming and entertainment offerings. Her appointment is seen as a strategic move to leverage her expertise in content strategy and industry leadership, potentially strengthening MGM’s market position and operational strategies.

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.