MGM - Embedded Expectations Analysis - 2018 08 13
MGM Resorts International (MGM:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 25.1x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management has concerns about Strip fundamentals, RevPAR, and demand in Vegas and MandalaySpecifically, management may have concerns about short-term booking rate pressure causing Strip revenues and margins to fall. Additionally, they may lack confidence in the sustainability of their increased Borgata slot revenue, and in their ability to achieve their RevPAR guidance. Moreover, they may be concerned about softness in the convention business affecting the Las Vegas market, and about the slow recovery of their Mandalay location following the shooting last year. Additionally, they may lack confidence in their ability to leverage tech investment to make their cash flows less capital intensive, and in the outlook for their MGM Springfield location
MGM Resorts International is a holding company. Through its subsidiaries, the company owns and operates casino, hotel, and entertainment resorts across the United States and in Macau. The company's segments include: Las Vegas Strip Resorts, which consists of casino resorts such as Bellagio, MGM Grand Las Vegas, Mandalay Bay, The Mirage, Luxor, New York-New York, Excalibur, and Park MGM; Regional Operations, which consists of casino resorts such as MGM Grand Detroit, Beau Rivage, Gold Strike Tunica, Borgata, MGM National Harbor, MGM Springfield, Empire City, and MGM Northfield Park; and MGM China, which owns and operates casino resorts and the related gaming subconcession and land concessions.
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