MGM

Based on the comprehensive analysis, here is an assessment of whether MGM stock is worth buying.

Technical Outlook MGM's technical picture is mixed, showing resilience with a positive three-month return but clear near-term weakness after a 7.45% monthly decline. Trading in the upper mid-range of its 52-week span without clear overbought or oversold signals presents a neutral setup, but the stock’s high beta and significant 36% maximum drawdown confirm its volatile nature, requiring a strong stomach for price swings.

Fundamental Health Fundamentally, MGM faces significant challenges. Despite generating substantial revenue, profitability has sharply reversed into losses, and the balance sheet is burdened by an extremely high debt load with an unsustainable interest coverage ratio. Weak operational efficiency, evidenced by a negative Return on Equity (ROE), indicates the company is not effectively creating shareholder value from its asset base, pointing to underlying operational pressures.

Valuation & Risk Valuation sends conflicting signals: attractive trailing ratios suggest potential value, but alarming forward-looking metrics and a sky-high EV/EBITDA ratio raise red flags about future earnings sustainability. The primary risk remains MGM’s high volatility and sensitivity to economic cycles, compounded by industry-specific headwinds like regulatory changes and the capital-intensive nature of its operations.

Investment Recommendation MGM is a speculative bet suitable only for investors with a high risk tolerance. The stock’s potential upside is tethered to a robust macroeconomic recovery boosting travel and discretionary spending, which could improve its troubled fundamentals. However, given the severe leverage, recent losses, and lack of a clear earnings catalyst, it is difficult to recommend a buy at this time. Investors should await clearer signs of sustained profitability and debt reduction before considering a position. This is not investment advice, for reference only.

RockFlow Model Forecast: Three Scenarios for 2026

Of course. Here is a 12-month outlook for MGM stock based on the provided analysis.

12-Month Outlook for MGM

The outlook for MGM is cautious, hinging on macroeconomic trends rather than company-specific catalysts. The primary upside driver is a sustained boom in consumer discretionary spending, particularly on travel and entertainment, which could boost revenue enough to offset its high operational costs and debt burden. However, significant risks dominate, including its highly leveraged balance sheet, lack of profitability, and sensitivity to an economic slowdown, which would severely pressure its finances. Given the mixed signals—attractive trailing valuation but weak forward-looking fundamentals—the stock is likely to remain volatile, with a performance heavily dependent on broader economic conditions rather than organic growth.

Wall Street Consensus

Most Wall Street analysts are optimistic about MGM's 12-month outlook, with consensus target around $34.41, indicating expected upside potential.

Overall, MGM has investment potential but also faces challenges. Here are key factors to weigh before investing.

MGM has demonstrated mixed but resilient performance, currently positioned in the upper mid-range of its 52-week span while exhibiting heightened volatility.

The stock has weakened recently with a 7.45% monthly decline but maintains a positive 6.78% three-month return, modestly outperforming the market by 3.41% over that period despite its high beta indicating significant volatility. This short-term pullback follows stronger intermediate gains.

Currently trading at $34.65, MGM sits approximately 37% above its 52-week low but remains 16% below its high, suggesting neither an overbought nor oversold condition. The substantial 36.12% maximum drawdown highlights the stock's volatile nature, characteristic of its high-beta profile.

Of course. Here is a fundamental analysis of MGM based on the provided data.

1. Revenue & Profitability

MGM generated substantial revenue of approximately $4.25 billion in Q3 2025, though this represents a slight sequential decrease from Q2. Profitability has deteriorated significantly, with the company swinging to an operating loss of -$113 million and a net loss of -$285 million in Q3 from a profitable position in the prior quarter. This is reflected in negative operating and net profit margins (-2.7% and -6.7%, respectively), indicating substantial pressure on earnings from operating expenses and other costs that outweighed a reasonably healthy gross profit margin of 43.4%.

2. Financial Health

The company's financial health is a primary concern, characterized by a highly leveraged balance sheet. The debt-to-equity ratio of 11.78 is exceptionally high, signaling significant reliance on debt financing. Furthermore, with an interest coverage ratio of -1.1, MGM's operating income is insufficient to cover its interest expenses, which creates substantial financial risk. While the current ratio of 1.23 suggests adequate short-term liquidity, the high debt load is the dominant factor in assessing the company's stability.

3. Operational Efficiency

Operational efficiency metrics are weak, primarily driven by the recent quarterly loss. The return on equity (ROE) is deeply negative at -10.7%, indicating that the company is not generating value for shareholders from its equity base. The asset turnover ratio of 0.10 suggests the company is generating only $0.10 in revenue for every dollar of assets, pointing to relatively inefficient use of its asset base to drive sales, which is likely impacted by the capital-intensive nature of its resort operations.

Based on the valuation metrics provided, MGM presents a complex picture. The stock appears nominally undervalued based on its trailing P/E of 11.52 and a low PS ratio of 0.55, further supported by a very low PEG ratio suggesting strong growth expectations relative to the earnings multiple. However, a significantly negative forward P/E and an extremely high EV/EBITDA ratio of over 270 are major red flags, indicating potentially unsustainable earnings or significant distortions in profitability that the market is anticipating.

A peer comparison using industry averages is not feasible, as the requisite data is unavailable. Without this benchmark, a conclusive assessment of MGM's relative valuation against its competitors cannot be made. Therefore, while the low trailing multiples suggest potential value, the alarming forward-looking metrics necessitate caution and a deeper investigation into the company's specific earnings outlook and capital structure.

MGM Resorts International demonstrates elevated volatility risk, with a beta of 1.46 indicating the stock is approximately 46% more volatile than the broader market. This heightened sensitivity to market movements is further evidenced by a significant one-year maximum drawdown of -36.12%, suggesting potential for substantial capital depreciation during market downturns. This combination points to a stock that may experience larger price swings compared to the overall market.

While the absence of significant short interest can be interpreted as a lack of strong bearish sentiment from sophisticated investors, the company faces substantial industry-specific risks. These include sensitivity to economic cycles affecting disposable income, regulatory changes in key markets like Las Vegas and Macau, and potential disruptions from labor disputes or unforeseen events. The capital-intensive nature of the casino and resort industry also presents ongoing liquidity and capital expenditure demands.