Yahoo Finance Why Is MGM (MGM) Down 5.7% Since Last Earnings Report?
It has been about a month since the last earnings report for MGM Resorts (MGM). Shares have lost about 5.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is MGM due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
MGM Resorts' Q1 Earnings & Revenues Top Estimates
MGM Resorts reported impressive first-quarter 2024 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was driven by solid performances at MGM China and luxury resort properties in Las Vegas.
Earnings & Revenue Discussion
MGM Resorts reported earnings per share (EPS) of 74, outpacing the Zacks Consensus Estimate of 60 cents. In the prior-year quarter, it incurred an adjusted EPS of 44 cents.
Total revenues were $4.38 billion, surpassing the Zacks Consensus Estimate of $4.2 billion by 4.8%. The top line increased 13.2% year over year on the back of strong contributions from MGM China.
MGM China
During the first quarter, MGM China's net revenues surged 71% year over year to $1.06 billion. The upside was attributed to the ramp-up of operations following the removal of COVID-19-related travel and entry restrictions in the prior year period. MGM China casino revenues were up 66% year over year to $920 million.
MGM China's adjusted property earnings before interest, taxes, depreciation, amortization and restructuring or rent costs (EBITDAR) amounted to $301 million compared with 169 million reported in the prior-year quarter.
Domestic Operations
Net revenues at Las Vegas Strip Resorts were $2.26 billion, up 3.6% year over year, primarily driven by a rise in ADR.
Adjusted property EBITDAR dropped 1% year over year to $828 million. Casino revenues were $498 million, down 1% year over year.
Net revenues from Regional operations totaled $909 million, down 3.8% year over year. The downside was caused by the sale of Gold Strike Tunica (in February 2023) and a decline in casino revenues. Adjusted property EBITDAR was $274 million, down 12% year over year.
Balance Sheet & Share Repurchase
MGM Resorts ended the first quarter with cash and cash equivalents of $2.72 billion compared with $2.93 billion at 2023-end. Long-term debt at the end of the quarter was $6.27 billion, down from $6.34 billion at 2023-end.
During the first quarter of 2024, MGM repurchased nearly 12 million shares for an aggregate of $511 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 24.24% due to these changes.
VGM Scores
At this time, MGM has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, MGM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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MGM Resorts International (MGM) : Free Stock Analysis Report
