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Should You Buy MGM Resorts International (NYSE:MGM)?

MGM Resorts International (NYSE:MGM) saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $38.03 and falling to the lows of $33.13. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether MGM Resorts International’s current trading price of $36.11 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at MGM Resorts International’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for MGM Resorts International

What’s the opportunity in MGM Resorts International?

MGM Resorts International appears to be overvalued by 21% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$36.11 on the market compared to my intrinsic value of $29.88. This means that the opportunity to buy MGM Resorts International at a good price has disappeared! But, is there another opportunity to buy low in the future? Since MGM Resorts International’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from MGM Resorts International?

NYSE:MGM Future Profit Apr 18th 18
NYSE:MGM Future Profit Apr 18th 18

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for MGM Resorts International, at least in the near future.

What this means for you:

Are you a shareholder? If you believe MGM is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to reduce your total portfolio risk. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on MGM for some time, now may not be the best time to enter into the stock. Price climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on MGM Resorts International. You can find everything you need to know about MGM Resorts International in the latest infographic research report. If you are no longer interested in MGM Resorts International, you can use our free platform to see my list of over 50 other stocks with a high growth potential.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.

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