This is an old version of MGM from 13 days ago (Oct 31, 2026).See the latest version
MGM
- Price
- $29.96
- Discount category
- Well below intrinsic value
- Next earnings
- Jan 28, 2027
- Next earnings is estimate
- Yes
- Company name
- MGM Resorts International
- Sector
- Casinos & resorts
- About
- MGM Resorts International owns and operates casino resorts. On the Las Vegas Strip, its resorts include Aria, Bellagio, The Cosmopolitan of Las Vegas and MGM Grand Las Vegas. It also operates regional casinos in other states, and it controls MGM China, which runs casino resorts in Macau. MGM Digital runs online gaming outside North America through LeoVegas, and MGM owns 50% of BetMGM, which offers online betting and gaming in North America. MGM leases the real estate of many of its resorts from VICI Properties and other owners, so it pays large rents. With a partner, it builds MGM Osaka, an integrated resort in Japan that it expects to open in 2030. People Inc., formerly IAC, owns about 26.5% of MGM's shares.
- Thesis
- The market prices MGM for weak results and for the end of a buyout proposal. On June 1, 2026, IAC, now People Inc., proposed to buy all other shares for $48.30 per share in cash, and on September 23, 2026, it withdrew the proposal. In Q3 2026, RevPAR on the Las Vegas Strip fell 8% on lower room rates, and Las Vegas Strip Segment Adjusted EBITDAR fell 12%. MGM China's Segment Adjusted EBITDAR fell 7% because it paid a higher branding fee, and consolidated Adjusted EBITDA fell to $403 million from $506 million. MGM also has large lease payments. For the gap to close, three things must be true. Las Vegas Strip room rates and EBITDAR must grow again. MGM said that October 2026 rebounded. MGM China must keep its margins while it pays the higher branding fee. MGM Digital must keep its losses small, and MGM must use the $1.4 billion left under its plan to repurchase shares. On October 27, 2026, People Inc. agreed to stay at or below 29.9% of the shares and to vote with the board on a change of control, and MGM said that this supports share repurchases. No transaction is contemplated. The Q4 2026 report, expected in late January or early February 2027, gives the next evidence. The gap closes slowly, over two to three years, unless a transaction comes. The main reason it may not close is weak demand in Las Vegas, which would lower room rates and gaming revenue.
- Risks
- Las Vegas depends on travel and consumer spending. RevPAR on the Las Vegas Strip fell 8% in Q3 2026, and Las Vegas Strip Segment Adjusted EBITDAR fell 12%. Weaker demand can lower room rates and gaming revenue further. MGM pays large rents for the resorts that it leases. Operating lease liabilities were $23.86 billion at September 30, 2026. These fixed payments make earnings fall fast when revenue falls. Macau results depend on China's economy and rules. MGM China's Segment Adjusted EBITDAR fell 7% in Q3 2026, partly because its branding fee to MGM rose by $22 million. MGM Digital loses money. Its Segment Adjusted EBITDAR loss was $61 million in the first nine months of 2026, and MGM recorded a goodwill impairment of $111 million for it in Q2 2026. More losses or write-downs are possible. MGM must still fund about JPY333 billion (about $2.1 billion) of its commitment to MGM Osaka at September 30, 2026, and it guarantees funding for the completion of the resort without a cap. Higher building costs can need more cash.
- Balance sheet
- Cash: $2.4B Debt: $5.7B Net debt: $3.3B Interest cover: 3.0× Undrawn credit line: $2.3B At September 30, 2026, debt principal was $5.70 billion, and cash was $2.40 billion. In September 2026, MGM repaid its $400 million of 4.625% notes due 2026 with cash on hand. MGM China holds $2.33 billion of the debt and $598 million of the cash. Its debt includes notes due from 2027 to 2033 and $331 million drawn on its revolving credit facility. The rest of the debt includes MGM's notes due from 2027 to 2036 and a senior secured yen credit facility of $344 million. No amounts were drawn on MGM's $2.3 billion revolving credit facility. Interest cover is operating income divided by interest expense for the first nine months of 2026. That operating income includes a net gain of $265 million on property transactions. Operating lease liabilities, mostly for resorts leased from VICI Properties, were $23.86 billion more. As of Sep 30, 2026.
- Checkpoints
- Oct 28, 2026: Q3 2026 earnings: Las Vegas and Macau. Failed. Watch: Growth in Las Vegas Strip EBITDAR and stable MGM China margins pass; a fall in Las Vegas EBITDAR fails. Outcome: Las Vegas Strip Segment Adjusted EBITDAR fell 12% on lower room rates, and MGM China's Segment Adjusted EBITDAR fell 7%. Jan 28, 2027 (estimate): Q4 2026 earnings: Las Vegas recovery and digital losses. Pending. Watch: Growth in Las Vegas Strip Segment Adjusted EBITDAR, smaller MGM Digital losses and continued share repurchases pass; another fall in Las Vegas EBITDAR or a stop to repurchases fails.
- Recent events
- Oct 28, 2026: MGM reported Q3 2026 results. Revenue was $4.2 billion, down 1%. Las Vegas Strip revenue fell 2% to $2.0 billion, RevPAR fell 8%, and Segment Adjusted EBITDAR fell 12% to $531 million. MGM China revenue rose 5% to a record $1.1 billion, but its Segment Adjusted EBITDAR fell 7% to $264 million, as its branding fee to MGM rose by $22 million. The MGM Digital loss fell to $4 million of Segment Adjusted EBITDAR from $23 million. Adjusted EPS was a loss of $0.11, compared with a profit of $0.24 a year earlier. MGM said that October 2026 rebounded in Las Vegas. Oct 27, 2026: MGM amended its voting agreement with People Inc. and Barry Diller, and it announced the change on October 28. People Inc. agreed not to buy shares that would take its group above 29.9% of MGM's shares. On a change of control, it will vote all its shares as the board recommends, subject to conditions. MGM agreed not to take defensive measures against People Inc. while it complies. MGM said that no transaction is contemplated. People Inc. owns about 26.5% of MGM's shares. Sep 23, 2026: People Inc., formerly IAC, withdrew its non-binding proposal to buy all MGM shares that it does not own. It said that it remains open to a strategic transaction with MGM. It owns about 26.5% of MGM's shares. Jul 29, 2026: MGM reported Q2 2026 results. Revenue was $4.5 billion, up 1%. Las Vegas Strip revenue rose 3% to $2.2 billion, while RevPAR fell 4%. MGM China's Segment Adjusted EBITDAR fell 15% to $257 million, and MGM Digital recorded a goodwill impairment of $111 million. Adjusted EPS was $0.59, compared with $0.79 a year earlier. In April 2026, MGM sold the operations of MGM Northfield Park for $546 million, and its annual rent to VICI fell by $53 million. Jun 1, 2026: IAC proposed to buy all MGM shares that it did not own for $48.30 per share in cash. The proposal was non-binding. May 13, 2026: MGM China Holdings sold $750 million of 6.25% senior notes due 2033. Apr 3, 2026: MGM signed a voting agreement with IAC and Barry Diller. When they own more than 25.73% of MGM's voting power, they vote the extra shares in the same proportion as the other shareholders.