MGM

MGM Resorts International

Consumer


Presented:04/24/2017
Price:$29.00
Cap:$16.80B
Current Price:$39.39
Cap:$11.97B

Presented

Date04/24/2017
Price$29.00
Market Cap$16.80B
Ent Value$32.06B
P/E Ratio15.1x
Book Value$10.83
Div Yield0%
Shares O/S579.18M
Ave Daily Vol9,543,007
Short Int3.95%

Current

Price$39.39
Market Cap$11.97B
MGM Resorts International is a holding company that engages in the ownership and operations of casino resorts, which offers gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. It operates through Wholly Owned Domestic Resorts, and MGM China segments. The Wholly Owned Domestic Resorts segment is the resorts owned by the company in the United States. The MGM China Segment is consist of operations of MGM Macau Resort and development of MGM Cotai. The company was founded by Kerkor Kerkorian on January 29, 1986 and is headquartered in Las Vegas, NV.

Publicly traded companies mentioned herein: Boyd Gaming Corporation (BYD), Caesars Entertainment Corp (CZR), MGM China Holdings Ltd (2282 HK), MGM Growth Properties LLC (MGP), MGM Resorts International (MGM), Red Rock Resorts Inc (RRR)

Highlights

The group discussed the attractive dynamics at play in the US regional and local gaming markets. Domestic gaming companies struggled in the wake of the financial crisis, and haven’t seen a bounce back. Many of them had to make “painful” capital decisions, but today they have morphed into “entertainment complexes” (as opposed to the “gambling dens” they used to be) that should benefit from a continuation of the Vegas recovery, RevPAR growth, and strength in consumer confidence. MGM, Boyd (BYD), Red Rock (RRR), and Caesars (CZR) all stand to benefit to varying degrees. MGM is particularly attractive on the long-side given its ownership of the two best properties in Las Vegas (the Bellagio and MGM Grand) and cheap valuation. At 7x expected 2018 EBITDA (ex Macau) the stock is undervalued, and if the multiple can expand to 10x the stock would be worth $35-37 (with optionality around further M&A activity in the sector).

  • Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

  • Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Request access to DeMatteo Research for full access

Request Access

Already have an account?

Idea Discussion

Commentor 1 - 2 weeks ago

Signing up and creating account with us, unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Commentor 1 - 2 weeks ago

Signing up and creating account with us, unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Idea Discussions display submitted commentary from our investor community.

To read and participate in the discussion with the presenter and investor base, request access to DeMatteo

Request Access

Already have an account?

An error occurred loading this content. Try again later or contact us.