MGM Resorts (MGM): Assessing Valuation and Market Sentiment After Recent Share Movement

MGM Resorts International (MGM) shares have shown some movement in recent weeks, with the stock rising nearly 3% in the past day and around 4% over the past month. Investors may be watching how current trends reflect broader sentiment on hospitality and leisure.

See our latest analysis for MGM Resorts International.

MGM Resorts International’s share price is up modestly over the last month. However, when looking at the bigger picture, the 1-year total shareholder return stands at a disappointing -11%. Momentum appears to be fading compared to last year, even though recent daily moves are drawing attention.

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With shares trailing their long-term highs but trading well below some analysts’ targets, the real question is whether MGM is being overlooked by the market or if expectations for future gains are already factored in.

Most Popular Narrative: 26.1% Undervalued

Based on the most widely followed narrative, MGM Resorts International's fair value is set higher than its last close, hinting at significant market upside if the projections play out. This perspective considers both near-term volatility and ambitious growth strategies.

MGM's strong focus on expanding its digital gaming and sports betting segments, including BetMGM North America and rapid progress in international markets like Brazil, is expected to unlock higher-margin, faster-growing revenue streams. This is anticipated to positively impact both long-term revenue growth and company EBITDA margins.

Read the complete narrative.

Curious what fuels this valuation? There is one forecast underlying these numbers that could surprise you, changing how you view MGM’s earnings potential. Find out what the narrative suggests will push margins and profits to new heights.

Result: Fair Value of $44.21 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, a decline in Las Vegas visitation or execution missteps with MGM's global expansion could still disrupt earnings momentum and challenge the optimistic growth narrative.

Find out about the key risks to this MGM Resorts International narrative.

Another View: What Does the Market Multiple Say?

Taking a different angle, MGM Resorts International's price-to-earnings ratio is currently 133x. This is significantly higher than both its peer group average of 24.8x and the US Hospitality industry average of 21.8x. The fair ratio, based on market regression, sits at 42.3x. This large gap suggests the stock is richly valued compared to its benchmarks, raising questions about whether investors are paying a premium for growth that may not materialize as anticipated. Could this premium signal opportunity, or is it a warning sign for future performance?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own MGM Resorts International Narrative

If you see things differently or prefer to dig into the numbers on your own, you have the tools to shape your personal view in just minutes with Do it your way.

A great starting point for your MGM Resorts International research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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