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Factors Setting the Tone for MGM Resorts' (MGM) Q4 Earnings

·4 min read

MGM Resorts International MGM is scheduled to report fourth-quarter 2021 results on Feb 9, 2022 after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 175%.

How are Estimates Placed?

The Zacks Consensus Estimate for the fourth-quarter earnings is pegged at 2 cents per share, indicating an improvement of 102.2% from a loss of 90 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at nearly $2,767 million. The metric suggests an increase of 85.3% from the year-ago quarter’s figure.

MGM Resorts International Price and EPS Surprise

MGM Resorts International Price and EPS Surprise
MGM Resorts International Price and EPS Surprise

MGM Resorts International price-eps-surprise | MGM Resorts International Quote

Let’s take a look at how things have shaped up in the quarter.

Factors to Note

MGM Resorts’ fourth-quarter performance is likely to have benefitted from pent-up consumer demand, rise in casino spend levels and improvements in group business. Changes made by MGM resorts in its operating model coupled with an emphasis on labor productivity, casino marketing efforts and streamlining initiatives are likely to have driven the company’s performance in the fourth quarter.

Relaunch of entertainment and F&B offerings in regional markets coupled with the easing of operational and capacity restrictions is likely to have aided the company’s Las Vegas performance in the fourth quarter. The Zacks Consensus Estimate for fourth-quarter revenues at Las Vegas Strip and Regional operations’ is pegged at $1,547 million and $870 million, suggesting a year-over-year improvement of 222.3% and 46.2%, respectively.

The company’s quarterly performance is likely to have benefited from strong digitalization efforts along with robust demand for sports betting. The company is consistently focused on sports-betting expansion. BetMGM continues to be a leader in the iGaming space, with market share reaching 32% in third-quarter 2021. Considering the positive momentum in markets and its unique and unparalleled online and offline offerings, the company anticipates net revenues associated with BetMGM to be in excess of $800 million in 2021.

However, pandemic-induced lower visitations in Macau are likely to have hurt the company’s performance in the fourth quarter. The absence of frictionless movement between Macau, Hong Kong and Mainland China coupled with an emphasis on vaccination rates is likely to have influenced the pace of recovery in the fourth quarter. The Zacks Consensus Estimate for MGM China is pegged at $296 million, suggesting a year-over-year decline of 3%. Increased expenses related to business developments in Japan as well as investments in IT and digital are likely to have hurt margins in the fourth quarter.

What the Zacks Model Unveils

Our proven model does not predict an earnings beat for MGM Resorts this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.

Earnings ESP: MGM Resorts has an Earnings ESP of -33.34%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Consumer Discretionary sector that investors may consider as our model shows that these have the right combination of elements to post an earnings beat:

Oxford Industries, Inc. OXM has an Earnings ESP of +2.97% and a Zacks Rank #1.

Shares of Oxford Industries have gained 13.6% in the past year. OXM’s earnings topped the consensus mark thrice but missed the same on one occasion, the average surprise being 96.7%.

Cedar Fair, L.P. FUN has an Earnings ESP of +6.02% and a Zacks Rank #1.

Shares of Cedar Fair have gained 32.4% in the past year. FUN’s earnings topped the consensus mark thrice but missed the same on one occasion, the average surprise being 16.5%.

PlayAGS, Inc. AGS has an Earnings ESP of +42.71% and a Zacks Rank #2.

Shares of PlayAGS have gained 18.8% in the past year. AGS’ earnings have topped the consensus mark thrice but missed the same on one occasion, the average surprise being 33.3%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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MGM Resorts International (MGM) : Free Stock Analysis Report

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Cedar Fair, L.P. (FUN) : Free Stock Analysis Report

PlayAGS, Inc. (AGS) : Free Stock Analysis Report

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