MGM
MGM Resorts International$36.68
Sell
Target $17.35
Report: Mar 07, 2026Consumer Cyclical • Gambling, Resorts & Casinos • Cyclical OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$36.68-52.7%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$17.35
(53% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$40.16
52 Week Low$25.30
Avg. 3 Month Volume4.99M
Efficiency
LTM Gross Margin44.4%
LTM EBITDA Margin10.9%
LTM EBIT Margin2.2%
LTM Operating Margin5.3%
LTM ROA0.5%
LTM ROE7.5%
LTM ROIC0.6%
LTM ROCE1.0%
Capital Structure
Market Cap (MM)$9.5B
Enterprise Value (MM)$38.7B
Shares Outstanding267.35M
Total Debt (MM)$31.26B
Cash & Equivalents (MM)$2.06B
LTM Net Debt (MM)$29.20B
LTM Net Debt/EBITDA15.3x
Growth
TTM Rev. Growth1.7%
Last 3-Yr Rev. CAGR10.1%
Last 3-Yr EBITDA CAGR-34.1%
Last 3-Yr EPS CAGR-40.1%
Valuation
Street Target Price$42.33
LTM EV/Revenue2.2x
LTM EV/Gross Profit5.0x
LTM EV/EBIT100.5x
LTM EV/EBITDA20.2x
LTM P/E46.0x
LTM EV/FCF26.3x
LTM P/FCF6.5x
LTM P/TB0.3x
LTM P/B3.9x
Dividend Yield0.0%
Payout Ratio0.0%
Executive SummarySituation: Current price is $36.68 versus fair value $17.35 (-52.7% expected return), and valuation confidence is stable. Debate: Bull case depends on BetMGM Cash Distributions Management expects BetMGM to distribute up to $200 million in 2026, which could temporarily boost sentiment. Bear case centers on Balance Sheet Insolvency The 1,287% Debt/Equity ratio and 0.92x interest coverage mean the company cannot survive a prolonged downturn without restructuring. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
BetMGM achieves its $500 million EBITDA target by 2027, providing a new source of high-margin cash flow; The Osaka, Japan project (opening 2030) delivers $400 million in annual owner earnings.
Bear Case
Interest coverage remains below 1.0x (currently 0.92x), leading to a credit event during the next cyclical downturn; Continued margin compression from triple-net lease escalators (2-3% annually) outpaces low-single-digit revenue growth.
Key Catalysts
Near-Term (0-6 months)Impact: Moderate
BetMGM Cash Distributions Management expects BetMGM to distribute up to $200 million in 2026, which could temporarily boost sentiment.
Mid-Term (6-18 months)Impact: High
Margin Realization Quarterly earnings reports are likely to show continued margin pressure from lease escalators, invalidating the turnaroun...
Long-Term (18+ months)Impact: Moderate
MGM is at a critical juncture as its interest coverage has dipped below 1.0x (0.92x) and its tangible book value has turned deeply negative,...
Primary Risks
Concern: High
Balance Sheet Insolvency The 1,287% Debt/Equity ratio and 0.92x interest coverage mean the company cannot survive a prolonged downturn witho...
Concern: Medium
Cyclical Downturn As a cyclical operator, MGM is highly sensitive to consumer discretionary spending; a recession would compress margins fur...
Concern: Medium
MGM's governance is currently in a 'Status Quo' phase, but the extreme leverage creates a high-stakes outcome tree: 1. Status Quo: Managemen...
Recent Activity
2026-02-04SEC Filing (SC 13G/A)
+8.08%Davis Selected Advisers reports 8.8% beneficial ownership of MGM Resorts International common stock.
2025-05-10Market Movement
+6.38%Market/Sector Move +6.38%
2025-02-13SEC Filing (8-K)
+17.46%MGM Resorts reports record full year 2024 revenues of $17.2 billion with strong performance from MGM China and accelerated BetMGM growth.
2024-10-31SEC Filing (8-K)
-10.96%MGM Resorts International reports third quarter 2024 financial and operating results.
2024-08-01SEC Filing (8-K)
-13.22%MGM Resorts International reports second quarter 2024 financial and operating results.
Valuation Table
7.9/10Decision Grade
Scenario Range
$0
Bear
$34
Bull
$37