How MGM Resorts International stock reacted to Q3 earnings
MGM Resorts International (MGM) moved after its 28 October Q3 release, as investors weighed largely unchanged sales against a smaller quarterly net loss and management commentary on cost pressures and mixed demand across its casino and digital businesses.
That Q3 update landed in the middle of a sharp swing for MGM Resorts International, with a 1-day share price return of 5.80% and a 7-day move of 20.35%. This comes after the stock fell 26.58% over the past 90 days and is still down 10.06% year to date, while the 1-year total shareholder return of 2.53% and 5-year total shareholder return decline of 28.72% point to short bursts of momentum on earnings news against a longer record where payouts and price together have not kept pace with recent volatility.
Scan how MGM Resorts International stacks up against other casino and leisure operators by reviewing our curated list of 34 high quality undervalued stocks that pair balance sheet strength with earnings power.
Bulls see MGM Resorts International as a beaten up casino and digital platform on steadier footing after Q3, while bears point to cost pressure and mixed demand. Which side does the current valuation lean toward?
Most Popular Narrative: 17% Undervalued
On the narrative view, MGM Resorts International screens as undervalued, with a fair value of $39.58 against a last close of $32.82. This frames Q3’s bounce as only a partial catch up to those expectations.
The Osaka integrated resort project, which is progressing on time and on budget with clearly outlined funding commitments through 2028, is expected to add a large new source of resort and gaming revenue once open and could diversify MGM Resorts International's earnings mix toward long term international cash flows.
Las Vegas initiatives that lean into large scale events, record convention business at a 20% room mix and value oriented all inclusive offers at properties like Luxor and Excalibur, which are attracting a high proportion of first time visitors on healthy margins, are designed to deepen occupancy and non gaming spend and may support more resilient revenue and earnings through cycles.
See why 19 investors see MGM Resorts International as 17% undervalued.
Result: Fair Value of $39.58 (UNDERVALUED)
Still, the narrative can crack if MGM Resorts International sees self insurance costs remain elevated or if its sizeable debt load constrains funding for projects such as Osaka.
Find out about the key risks to this MGM Resorts International narrative.
Next Steps
Mixed signals on MGM Resorts International so far. If you want to move quickly and build your own view from the ground up, start by weighing both sides of the story in the 3 key rewards and 3 important warning signs.
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