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Based on MGM Resorts International's (NYSE:MGM) earnings update in December 2018, analysts seem cautiously optimistic, with profits predicted to increase by 48% next year, though this is evidently lower than the historical 5-year average earnings growth of 60%. Currently with trailing-twelve-month earnings of US$445m, we can expect this to reach US$661m by 2020. Below is a brief commentary around MGM Resorts International's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
What can we expect from MGM Resorts International in the longer term?
The view from 17 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of US$445m and the final forecast of US$964m by 2022, the annual rate of growth for MGM’s earnings is 21%. This leads to an EPS of $1.86 in the final year of projections relative to the current EPS of $0.82. With a current profit margin of 3.9%, this movement will result in a margin of 7.0% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For MGM Resorts International, I've compiled three important aspects you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is MGM Resorts International worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MGM Resorts International is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of MGM Resorts International? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.