MGM - Embedded Expectations Analysis - 2020 06 23
MGM Resorts International (MGM:USA) currently trades above historical averages relative to UAFRS-based (Uniform) earnings, with an 80.4x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about cash generation, the sports betting market, and Macau regulationsSpecifically, management may lack confidence in their ability to efficiently spend their cash, offset additional costs from reopening businesses, and achieve the needed occupancy rate to generate meaningful cash. In addition, they may have concerns about their recent debt issuances, the sustainability of strong 2021 bookings, and the potential need to liquidate their stake in unconsolidated affiliates. Moreover, they may be exaggerating their ability to navigate the crisis, their focus on sports and iGaming, and opportunities in Japan. Furthermore, they may lack confidence in their ability to acquire a license and concession renewal in Macau, capitalize on the growing sports betting market in the U.S., and maintain their live entertainment partnerships
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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