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Why Is MGM (MGM) Down 13.7% Since Last Earnings Report?

A month has gone by since the last earnings report for MGM Resorts (MGM). Shares have lost about 13.7% 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 its most recent earnings report in order to get a better handle on the important drivers.

MGM Resorts’ Q1 Earnings & Revenues Top, Rise Y/Y

MGM Resorts reported impressive first-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.

Earnings & Revenue Discussion

MGM Resorts reported earnings per share (EPS) of 44 cents, beating the Zacks Consensus Estimate of 4 cents. In the prior-year quarter, the company had reported an EPS of 1 cent.
Total revenues were $3,873.3 million, surpassing the Zacks Consensus Estimate of $3,514 million by 10.2%. The top line increased 36% from $2,854.3 million reported in the year-ago period. The upside was primarily driven by increased business volume and travel activity, primarily at MGM China and Las Vegas Strip Resorts.

MGM China

During the first quarter, MGM China's net revenues surged 130% year over year to $618 million. The upside was attributed to the removal of COVID-related travel restrictions in Macau. MGM China casino revenues increased 140% year over year to $555 million.

MGM China's adjusted property earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) amounted to $169 million against adjusted property EBITDAR of ($26) million reported in the prior-year quarter.

Domestic Operations

Net revenues at Las Vegas Strip Resorts during the first quarter were $2.2 billion, up 31% year over year. The company benefited from the inclusion of The Cosmopolitan, increased business volume and travel activity on a year-over-year basis.

Adjusted property EBITDAR surged 41% year over year to $836 million. Casino revenues in the quarter under review were $501 million, up 5% year over year.

During the quarter under review, net revenues from the company's regional operations totaled $946 million, up 6% from the prior-year quarter’s levels. The upside was primarily attributed to an increase in non-gaming business volume. Casino revenues in the quarter came in at $717 million, up 2% from the reported value in the prior-year quarter.

Adjusted property EBITDAR was $313 million, on par year over year. Adjusted property EBITDAR margin contracted 206 basis points (bps) year over year to 33.1%.

Balance Sheet & Share Repurchase

MGM Resorts ended the first quarter with cash and cash equivalents of $4,505.3 million compared with $5,911.9 million reported in the 2022-end. The company's long-term debt at the end of the quarter was $6,841.5 million, down from $7,432.8 million at 2022-end.

During the first quarter of 2023, the company repurchased nearly 12 million shares for an aggregate of $487 million. As of Mar 31, the company stated the availability of $2 billion under its February 2023 repurchase program.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

The consensus estimate has shifted 867.5% 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 20% 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.


Estimates have been broadly 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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