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MGM Resorts International (MGM), based in Las Vegas, Nevada, is a prominent global operator of casino, hotel, and entertainment resorts with a market capitalization of $9.8 billion. The company delivers a wide range of services, including accommodations, dining, event hosting, and hospitality management, catering to both casino and non-casino properties. MGM is set to release its fiscal 2024 fourth-quarter earnings after the market closes on Wednesday, Feb. 12.
Ahead of the event, analysts expect MGM to report a profit of $0.35 per share on a diluted basis, down 67% from $1.06 per share in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimates in three of its last four quarterly reports, while missing on another occasion.
For the full year 2024, analysts expect MGM to report EPS of $2.41, down 9.7% from $2.67 in fiscal 2023.
Shares of MGM have plunged 21.6% over the past year, underperforming the S&P 500’s ($SPX) 24.6% gains and the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 30.1% gains over the same time frame.
MGM Resorts has underperformed the broader market due to weak Las Vegas casino performance, significant losses in its BetMGM joint venture from high marketing expenses, and compressed margins in Macau.
In addition, MGM’s Q3 earnings report, released on Oct. 30, triggered an 11% drop in its stock as the company fell short of both revenue and earnings expectations. The underwhelming performance was largely attributed to a sharp decline in Las Vegas table games volume and reduced margins in Macau, driven by one-time expenses and higher entertainment-related costs.
Analysts’ consensus opinion on MGM stock is very bullish, with a “Strong Buy” rating overall. Out of 18 analysts covering the stock, 15 advise a “Strong Buy” rating, and three suggest a “Hold.” MGM’s average analyst price target is $49.42, indicating a potential upside of 49.2% from the current levels.
