Where MGM Resorts International (NYSE:MGM) Stands In Terms Of Earnings Growth Against Its Industry
Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at MGM Resorts International’s (NYSE:MGM) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. Check out our latest analysis for MGM Resorts International
How Well Did MGM Perform?
For the most up-to-date info, I use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This allows me to assess various companies in a uniform manner using the latest information. For MGM Resorts International, its latest earnings (trailing twelve month) is US$591.16M, which, relative to the previous year’s level, has climbed up by over 100%. Since these values may be fairly nearsighted, I’ve estimated an annualized five-year figure for MGM’s net income, which stands at US$221.11M This suggests that, generally, MGM Resorts International has been able to increasingly grow its profits over the past couple of years as well.
How has it been able to do this? Well, let’s take a look at if it is solely due to industry tailwinds, or if MGM Resorts International has experienced some company-specific growth. Over the last few years, MGM Resorts International top-line expansion has outpaced earnings and the growth rate of expenses. Though this resulted in a margin contraction, it has cushioned MGM Resorts International’s earnings contraction. Inspecting growth from a sector-level, the US hospitality industry has been growing its average earnings by double-digit 14.16% in the past twelve months, and 10.97% over the previous five years. This shows that any uplift the industry is profiting from, MGM Resorts International is capable of leveraging this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While MGM Resorts International has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research MGM Resorts International to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for MGM’s future growth? Take a look at our free research report of analyst consensus for MGM’s outlook.
2. Financial Health: Is MGM’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.
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.
