MGM Fair Value Estimate
$47.9731.4% undervalued
Blended fair value estimate based on DCF, Graham Number, and earnings-based models.
MGM Resorts International
Exchange: NYSESector: Consumer CyclicalIndustry: Resorts & Casinos
MGM Resorts International is an S&P 500® global gaming and entertainment company with national and international destinations featuring best-in-class hotels and casinos, state-of-the-art meetings and conference spaces, incredible live and theatrical entertainment experiences, and an extensive array of restaurant, nightlife and retail offerings. MGM Resorts creates immersive, iconic experiences through its suite of Las Vegas-inspired brands. The MGM Resorts portfolio encompasses 31 unique hotel and gaming destinations globally, including some of the most recognizable resort brands in the industry. The Company's 50/50 venture, BetMGM, LLC, offers sports betting and online gaming in North America through market-leading brands, including BetMGM and partypoker, and the Company's subsidiary, LV Lion Holding Limited, offers sports betting and online gaming through market-leading brands in several jurisdictions throughout Europe and Brazil. The Company is currently pursuing targeted expansion in Asia through an integrated resort development in Japan. Through its Focused on What Matters philosophy, MGM Resorts commits to creating a more sustainable future, while striving to make a bigger difference in the lives of its employees, guests and in the communities where it operates. The global employees of MGM Resorts are proud of their company for being recognized as one of FORTUNE® Magazine's World's Most Admired Companies®.
Current Price
$36.51
+1.36%GoodMoat Value
$47.97
31.4% undervaluedProfile
Valuation (TTM)
Market Cap$9.34B
P/E51.20
EV$39.31B
P/B3.84
Shares Out255.83M
P/Sales0.53
Revenue$17.72B
EV/EBITDA20.31
MGM Resorts International (MGM) Valuation
GoodMoat Analysis
MGM Resorts International appears to be trading at a favourable discount to its estimated intrinsic value, offering a significant margin of safety. However, its high P/E ratio and low profitability margins suggest the underlying business quality may not fully support a traditional value investment thesis without careful consideration of cyclical risks.
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Based on the provided GoodMoat Target of $46.84, the current price of $37.49 implies a margin of safety of approximately 20%. According to the GoodMoat Investment Framework's valuation bands, a 20–40% discount is considered 'Favourable,' placing MGM at the lower end of this attractive range. This suggests the stock is not deeply undervalued but is priced below its estimated fair value. The free cash flow yield of 14.3% is also a strong positive signal, indicating robust cash generation relative to its market price. However, the valuation picture is mixed when examining multiples. The P/E of 49.8 is extremely high, both in absolute terms and relative to the sector average for consumer cyclicals, which typically trades at a fraction of that multiple. This elevated P/E is a function of currently depressed earnings (EPS of $0.76), as indicated by the low profit margin of 1.2%. For a value investor, this presents a dichotomy: the stock is cheap on a cash flow and intrinsic value basis but appears expensive on an earnings multiple because profitability is cyclically low. The assessment hinges on whether the current earnings are trough figures from which the company can recover, thereby justifying the high P/E. Without strong underlying quality indicators like high ROIC or expanding margins, the high P/E is a point of caution that requires confidence in a significant earnings rebound.
MGM Valuation Metrics
FCF$1.47B
FCF Growth Rate5.34%
EPS Growth (CAGR)-31.82%
WACC10.00%
Fair Value Models
Graham Number, PEG-based, and Earnings-based models
View Fair Value →MGM Valuation & Fair Value Analysis
MGM Resorts International (MGM) valuation analysis using multiple fair value methodologies. GoodMoat calculates a blended fair value target using discounted cash flow (DCF) analysis, the Graham Number, and earnings-based valuation models.
The GoodMoat Fair Value target for MGM Resorts International is $47.97. The current stock price is $36.51, suggesting the stock is 31.4% undervalued.
The price-to-earnings (P/E) ratio is 51.20. Price-to-book ratio is 3.84. Price-to-sales ratio is 0.53. Enterprise value to EBITDA is 20.31. PEG ratio is -8.87.
GoodMoat's valuation models include the Graham Number (based on EPS and book value), an earnings-based model (discounted future EPS), and a PEG-adjusted valuation. The three models are averaged to produce a blended fair value estimate. Use these tools alongside the DCF calculator and reverse DCF to form a comprehensive view of MGM Resorts International's intrinsic value.