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MGM Resorts International MGM

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Stock XNYS Rating as of
$41.03 −0.62 (1.49%)
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As of Delayed Price Pre-Open: $41.35 +0.32
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Company Report

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MGM's Vegas and Macao Sales Continue to Expand, While Digital Faces Intense Competition

Dan Wasiolek

No-moat MGM Resorts' Macao's (17% of 2023 EBITDAR) sales rebounded sharply in 2023 (reaching back above 2019's level in the second quarter), after the Chinese government removed covid restrictions on Jan. 8, 2023. And although Macao faces elevated operational risk from government oversight, the company remains positioned for the attractive long-term growth opportunities in the region. Further, MGM's leading omnichannel presence in the US should aid it in the highly competitive sports betting and iGaming growth markets. Also, we expect the company to have a Japanese integrated resort in 2030, accounting for an estimated 5% of total EBITDAR that year and generating attractive returns on invested capital in the low teens.

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Price vs Fair Value

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MGM is trading at a 44% premium.
Price
$41.03
Fair Value
$14.00
Uncertainty
High
1-Star Price
$58.65
5-Star Price
$72.00
Economic Moat
Ctykn
Capital Allocation
Fssktjp

Bulls Say, Bears Say

Bulls

MGM was awarded the only urban Japanese gaming concession due to its strong experience operating leading resorts in Las Vegas and its successful record of working with partners.

Bears

The majority of cash flow for MGM comes from the Las Vegas region, which has lower regulatory barriers, margins, and ROICs than Macao.

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Trading Information

Previous Close Price
$41.65
Day Range
$40.96–41.91
52-Week Range
$34.12–51.35
Bid/Ask
$40.87 / $41.34
Market Cap
$12.87 Bil
Volume/Avg
2,378 / 3.4 Mil

Key Statistics

Price/Earnings (Normalized)
13.74
Price/Sales
0.86
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
17.98%

Company Profile

MGM Resorts is the largest resort operator on the Las Vegas Strip with 35,000 guest rooms and suites, representing about one fourth of all units in the market. The company's Vegas properties include MGM Grand, Mandalay Bay, Park MGM, Luxor, New York-New York, and Bellagio. The Strip contributed approximately 62% of total EBITDAR in 2023. MGM also owns US regional assets, which represented low-20s of 2023 EBITDAR (MGM's Macao EBITDAR was 17% of the total in 2023). MGM's US sports and iGaming operations are currently a high-single-digit percentage of its total revenue. The company also operates the 56%-owned MGM China casinos with a new property that opened on the Cotai Strip in early 2018. Further, we estimate MGM will open a resort in Japan in 2030.
Sector
Consumer Cyclical
Industry
Resorts & Casinos
Stock Style Box
Mid Core
Total Number of Employees
63,000
Website
https://www.mgmresorts.com

Competitors

Valuation

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Metric
MGM
WYNN
DKNG
Price/Earnings (Normalized)
 13.7417.93401.91
Price/Book Value
 3.79—25.33
Price/Sales
 0.861.565.08
Price/Cash Flow
 5.387.44204.46
Price/Earnings
MGM
WYNN
DKNG

Financial Strength

Metric
MGM
WYNN
DKNG
Quick Ratio
 1.231.351.05
Current Ratio
 1.511.431.34
Interest Coverage
 3.661.41−316.16
Quick Ratio
MGM
WYNN
DKNG

Profitability

Metric
MGM
WYNN
DKNG
Return on Assets (Normalized)
 3.03%8.85%−5.42%
Return on Equity (Normalized)
 31.53%—−22.77%
Return on Invested Capital (Normalized)
 4.74%13.75%−11.27%
Return on Assets
MGM
WYNN
DKNG
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Resorts & Casinos Industry Comparables

Screen in Investor
Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
LVS
Las Vegas Sands CorpRktcdxrzJfrmgx$35.0 Bil
GXYYY
Galaxy Entertainment Group Ltd ADR—Njgwkg$22.4 Bil
GXYEF
Galaxy Entertainment Group Ltd—Vsgvdr$22.4 Bil
SCHYF
Sands China Ltd Shs Unitary 144A/Reg S—Rwmdjj$21.8 Bil
SCHYY
Sands China Ltd ADR—Ygbzzry$21.8 Bil
WYNN
Wynn Resorts LtdTfnnyxlskSjfvck$10.8 Bil
CZR
Caesars Entertainment IncMqlhrjtrcYvhzw$7.7 Bil
MLCO
Melco Resorts and Entertainment Ltd ADRRwpgzvnplLcqnbj$3.8 Bil
PENN
PENN Entertainment IncQhqncqsrVdtv$2.4 Bil

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