MGM Resorts International
MGM
$44.10
+0.07%
MGM Resorts International is the largest resort operator on the Las Vegas Strip, with 37,000 guest rooms and suites across iconic properties such as MGM Grand, Bellagio, and Mandalay Bay, and also operates regional US casinos and a 56%-owned Macau business. The company is a market leader in the gambling, resorts, and casinos industry, distinguished by its scale, prime Strip real estate, and growing sports and i-gaming operations. Currently, the stock is at the center of a potential buyout narrative, as a major shareholder has made a move to take the company private, with the market pricing in expectations of a higher bid. This has driven significant investor attention and a sharp rally in the stock, while the company continues to focus on expanding its digital footprint and international presence, including a planned resort in Japan by 2030.…
MGM
MGM Resorts International
$44.10
Related headlines
Investment Opinion: Should I buy MGM Today?
Based on the analysis, MGM is rated a Buy, with a thesis that the buyout offer provides a valuation floor and the company's strong cash flow generation supports upside. The analyst consensus is Buy with an average target of $50.57, implying 13.1% upside from the current price of $44.70. The high target of $60 suggests 34.2% upside, reflecting potential buyout premium or strong operational performance. The stock's 1-year price change of +27.4% outperforms the S&P 500, and the forward PE of 21.9x is reasonable if earnings grow as expected. The company generates $1.73 billion in TTM free cash flow, providing a solid base for shareholder returns. However, the high debt-to-equity ratio of 23.1 and the elevated trailing PE of 47.4x are key risks. The rating would upgrade to Strong Buy if the buyout completes at a price above $50, or downgrade to Hold if revenue growth decelerates below 3% or the buyout fails. Overall, MGM is fairly valued relative to its growth prospects, but the buyout premium is not fully reflected in the current price.
Sign up to view all
MGM 12-Month Price Forecast
The AI assessment is bullish with medium confidence. The buyout narrative provides a strong catalyst, and the company's cash flow generation supports the valuation. However, the high leverage and earnings volatility introduce uncertainty. The stance would upgrade to high confidence if a higher bid is announced, or downgrade to neutral if the buyout fails and revenue growth slows.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on MGM Resorts International's 12-month outlook, with a consensus price target around $50.57 and implied upside of +14.7% versus the current price.
Average Target
$50.57
0 analysts
Implied Upside
+14.7%
vs. current price
Analyst Count
—
covering this stock
Price Range
$43 - $60
Analyst target range
The target price range spans from a low of $43.00 to a high of $60.00, with the high target suggesting a potential upside of 34.2% from the current price, likely assuming a successful buyout at a premium or strong operational performance. The low target of $43.00 is only 3.8% below the current price, indicating that even the most bearish analyst sees limited downside, possibly due to the buyout floor. The wide spread between low and high targets (17 points) reflects high uncertainty around the buyout outcome and the company's future growth trajectory. Recent rating actions show a mix of upgrades and downgrades, with Stifel and CBRE moving to Hold from Buy, while Wells Fargo upgraded from Underweight to Equal Weight, suggesting some analysts are becoming more cautious after the sharp rally.
Bulls vs Bears: MGM Investment Factors
MGM presents a compelling bull case driven by the buyout narrative, strong operational performance, and positive free cash flow. However, the bear case is anchored by extreme leverage, high valuation, and earnings volatility. Currently, the bull case has stronger evidence given the buyout floor and analyst consensus, but the key tension is whether the buyout will complete at a higher price or if the stock will revert to fundamentals. The single most important factor is the outcome of the buyout negotiations, which could either validate the current price or lead to a significant correction if the deal falls through.
Bullish
- Buyout offer provides valuation floor: Barry Diller's IAC made a move to take MGM private, with the stock jumping 16% on June 1, 2026. The market is pricing the stock above the initial offer, signaling strong belief in a higher bid, which supports the stock price and limits downside.
- Strong 1-year price performance: MGM's stock is up 27.4% over the past year, outperforming the S&P 500's 21.5% gain. The stock trades at 86.6% of its 52-week range, indicating positive momentum and investor confidence in the company's operations and buyout potential.
- Revenue growth and stable base: Q1 2026 revenue grew 4.2% YoY to $4.45 billion, with a stable quarterly trend around $4.3-4.6 billion. The Strip contributes 56% of EBITDAR, providing a strong cash flow engine, and the company has a growing sports and i-gaming segment.
- Analyst consensus is Buy with upside: The average analyst target is $50.57, implying 13.1% upside from the current price of $44.70. The high target of $60 suggests 34.2% upside, reflecting potential buyout premium or strong operational performance.
Bearish
- High leverage with D/E of 23.1: MGM's debt-to-equity ratio of 23.1 is extremely high, indicating significant financial leverage. This amplifies risk if revenue declines or interest rates rise, and could constrain financial flexibility.
- Elevated trailing PE of 47.4x: The trailing PE of 47.4x is well above the market average, reflecting high earnings expectations. The forward PE of 21.9x implies a massive earnings jump, which may not materialize if growth disappoints.
- Earnings volatility and Q3 loss: Q3 2025 saw a net loss of $285 million, with EPS of -$1.05, due to impairments and other charges. This highlights the earnings volatility inherent in the gaming industry, which can deter risk-averse investors.
- Buyout uncertainty and overbought conditions: The stock trades above the initial buyout offer, and technicals suggest it may be overbought in the near term. If a higher bid does not materialize, the stock could correct sharply, as seen in the 22.76% max drawdown over the past year.
MGM Technical Analysis
MGM's stock is in a strong uptrend, with a 1-year price change of +27.4%, significantly outperforming the S&P 500's +21.5% over the same period. The current price of $44.70 sits at 86.6% of its 52-week range (low $29.19, high $51.59), indicating the stock is trading near the upper end of its yearly range, which typically reflects positive momentum and investor confidence. This positioning suggests the market is rewarding the company's operational performance and the potential buyout premium, though it also raises the risk of a pullback if sentiment shifts.
Beta
1.30
1.30x market volatility
Max Drawdown
-22.8%
Largest decline past year
52-Week Range
$29-$52
Price range past year
Annual Return
+21.4%
Cumulative gain past year
| Period | MGM Return | S&P 500 |
|---|---|---|
| 1m | -5.8% | +2.9% |
| 3m | +19.3% | +5.0% |
| 6m | +29.2% | +13.9% |
| 1y | +21.4% | +20.4% |
| ytd | +20.9% | +13.8% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
MGM Fundamental Analysis
Revenue for Q1 2026 was $4.45 billion, up 4.2% year-over-year from $4.28 billion in Q1 2025, showing steady but modest growth. The trailing twelve-month revenue trend shows quarterly figures of $4.45B (Q1 2026), $4.61B (Q4 2025), $4.25B (Q3 2025), and $4.40B (Q2 2025), indicating a stable revenue base with slight fluctuations. Casino revenue is the largest segment at $2.38 billion, followed by occupancy at $0.87 billion, food and beverage at $0.80 billion, and entertainment/retail at $0.40 billion, with the Strip contributing approximately 56% of total EBITDAR in 2025, highlighting the core driver of growth.
Quarterly Revenue
$4.5B
2026-03
Revenue YoY Growth
+4.2%
YoY Comparison
Gross Margin
44.7%
Latest Quarter
Free Cash Flow
$1.7B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is MGM Overvalued?
Given that MGM has positive net income (TTM net income of $125 million), the PE ratio is the primary valuation metric. The trailing PE is 47.4x, while the forward PE is 21.9x, implying the market expects significant earnings growth. The gap between trailing and forward PE suggests that the market is pricing in a substantial improvement in profitability, likely driven by cost efficiencies and the potential buyout premium. This is a wide spread, indicating high growth expectations that may or may not be realized.
PE
47.4x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 2x~20x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
37.1x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are significant. MGM's debt-to-equity ratio of 23.1 indicates heavy leverage, which amplifies the impact of any revenue downturn. The company's interest expense was $100.7 million in Q1 2026, and with a net margin of only 1.2%, a small decline in revenue could wipe out profits. Additionally, the trailing PE of 47.4x is high, and the forward PE of 21.9x implies aggressive earnings growth expectations that may not be met. The company's revenue is concentrated in the Las Vegas Strip (56% of EBITDAR), making it highly sensitive to tourism trends and economic cycles. Furthermore, the Q3 2025 net loss of $285 million demonstrates earnings volatility, which could recur due to impairments or other charges.
FAQ
The key risks are: 1) Financial risk: high debt-to-equity of 23.1, which could strain cash flow if interest rates rise. 2) Market risk: the stock is sensitive to economic cycles, with a beta of 1.3, and a downturn could reduce gaming revenue. 3) Company-specific risk: the buyout may fail, leading to a sharp correction. 4) Regulatory risk: changes in gaming laws or tax rates could impact profitability. The most severe risk is a failed buyout, which could send the stock to the 52-week low of $29.19, a 34.7% downside from the current price.
The 12-month forecast is bullish, with a base case target of $48-52 (45% probability), a bull case of $55-60 (35% probability), and a bear case of $40-43 (20% probability). The base case assumes the buyout completes at a modest premium, while the bull case assumes a higher bid or strong operational performance. The bear case assumes the buyout fails and the stock reverts to fundamentals. The most likely scenario is the base case, with the stock trading near the analyst average target of $50.57.
MGM's trailing PE of 47.4x is high, but the forward PE of 21.9x suggests the market expects significant earnings growth. Compared to the industry average, the forward PE is reasonable. The stock trades at 0.55x sales, which is low, and 3.98x book value, which is moderate. The valuation implies the market expects a successful buyout or strong operational performance. If the buyout fails, the stock could be overvalued, but if it succeeds, it is undervalued relative to the potential offer price.
MGM is a good buy for investors who believe the buyout will complete at a higher price, given the 13.1% upside to the average analyst target of $50.57. The stock has strong momentum, up 27.4% over the past year, and the buyout offer provides a floor. However, the high debt-to-equity ratio of 23.1 and the trailing PE of 47.4x are risks. If the buyout fails, the stock could fall to the low target of $43, a 3.8% downside. Overall, it is a buy for risk-tolerant investors, but not for those seeking safety.
MGM is suitable for both short-term and long-term investment, but with different risk profiles. In the short term, the stock is driven by buyout news and could be volatile, offering trading opportunities. For long-term investors, the company's strong market position, growing digital segment, and planned Japan resort provide growth potential. However, the high leverage and earnings volatility make it a higher-risk long-term hold. A minimum holding period of 2-3 years is recommended to ride out the buyout uncertainty and benefit from operational improvements.