MGM gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 132 industry peers in the Hotels, Restaurants & Leisure industry. MGM scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. MGM has a correct valuation and a medium growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

MGM had positive earnings in the past year.
MGM had a positive operating cash flow in the past year.
Of the past 5 years MGM 4 years were profitable.
MGM had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

The Return On Assets of MGM (0.16%) is worse than 62.12% of its industry peers.
MGM's Return On Equity of 2.48% is in line compared to the rest of the industry. MGM outperforms 58.33% of its industry peers.
With a Return On Invested Capital value of 2.82%, MGM is not doing good in the industry: 62.88% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
ROA	0.16%
ROE	2.48%
ROIC	2.82%

ROA(3y)2.54%

ROA(5y)1.55%

ROE(3y)28.15%

ROE(5y)17.7%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

MGM's Profit Margin of 0.38% is on the low side compared to the rest of the industry. MGM is outperformed by 61.36% of its industry peers.
In the last couple of years the Profit Margin of MGM has declined.
MGM has a Operating Margin (7.90%) which is comparable to the rest of the industry.
MGM's Operating Margin has declined in the last couple of years.
MGM has a Gross Margin (44.65%) which is comparable to the rest of the industry.
MGM's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	7.9%
PM (TTM)	0.38%
GM	44.65%

OM growth 3Y18.28%

OM growth 5Y-2.59%

PM growth 3Y-29.19%

PM growth 5Y-22.93%

GM growth 3Y-1.78%

GM growth 5Y2.08%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so MGM is destroying value.
Compared to 1 year ago, MGM has less shares outstanding
Compared to 5 years ago, MGM has less shares outstanding
MGM has a worse debt/assets ratio than last year.

2.2 Solvency

Based on the Altman-Z score of 0.77, we must say that MGM is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.77, MGM is doing worse than 68.94% of the companies in the same industry.
MGM has a debt to FCF ratio of 4.70. This is a neutral value as MGM would need 4.70 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 4.70, MGM is doing good in the industry, outperforming 75.76% of the companies in the same industry.
A Debt/Equity ratio of 2.38 is on the high side and indicates that MGM has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.38, MGM is in line with its industry, outperforming 46.97% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	2.38
Debt/FCF	4.7
Altman-Z	0.77

ROIC/WACC0.36

WACC7.91%

2.3 Liquidity

A Current Ratio of 1.23 indicates that MGM should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.23, MGM is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
MGM has a Quick Ratio of 1.19. This is a normal value and indicates that MGM is financially healthy and should not expect problems in meeting its short term obligations.
MGM has a better Quick ratio (1.19) than 65.15% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.23
Quick Ratio	1.19

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

MGM shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -32.19%.
The Earnings Per Share has been growing by 65.28% on average over the past years. This is a very strong growth
The Revenue has been growing slightly by 0.05% in the past year.
Measured over the past years, MGM shows a small growth in Revenue. The Revenue has been growing by 5.97% on average per year.

EPS 1Y (TTM)-32.19%

EPS 3Y-0.18%

EPS 5Y65.28%

EPS Q2Q%-55.56%

Revenue 1Y (TTM)0.05%

Revenue growth 3Y21.22%

Revenue growth 5Y5.97%

Sales Q2Q%1.61%

3.2 Future

MGM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.07% yearly.
Based on estimates for the next years, MGM will show a small growth in Revenue. The Revenue will grow by 2.76% on average per year.

EPS Next Y-16.49%

EPS Next 2Y-6.04%

EPS Next 3Y4.2%

EPS Next 5Y8.07%

Revenue Next Year1.01%

Revenue Next 2Y1.12%

Revenue Next 3Y1.39%

Revenue Next 5Y2.76%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 15.09, MGM is valued correctly.
Based on the Price/Earnings ratio, MGM is valued a bit cheaper than 79.55% of the companies in the same industry.
MGM is valuated rather cheaply when we compare the Price/Earnings ratio to 28.60, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 14.32, which indicates a correct valuation of MGM.
MGM's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. MGM is cheaper than 75.76% of the companies in the same industry.
MGM is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	15.09
Fwd PE	14.32

4.2 Price Multiples

91.67% of the companies in the same industry are more expensive than MGM, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MGM indicates a rather cheap valuation: MGM is cheaper than 96.21% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	6.54
EV/EBITDA	5.82

4.3 Compensation for Growth

PEG (NY)N/A

PEG (5Y)0.23

EPS Next 2Y-6.04%

EPS Next 3Y4.2%

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5. Dividend

5.1 Amount

With a yearly dividend of 0.02%, MGM is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.21, MGM has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 1.82, MGM's dividend is way lower than the S&P500 average.

		Industry Rank	Sector Rank
Dividend Yield	0.02%

5.2 History

MGM has been paying a dividend for over 5 years, so it has already some track record.

Dividend Growth(5Y)N/A

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

DP0%

EPS Next 2Y-6.04%

EPS Next 3Y4.2%

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MGM RESORTS INTERNATIONAL / MGM FAQ

What is the fundamental rating for MGM stock?

ChartMill assigns a fundamental rating of 4 / 10 to MGM.

Can you provide the valuation status for MGM RESORTS INTERNATIONAL?

ChartMill assigns a valuation rating of 5 / 10 to MGM RESORTS INTERNATIONAL (MGM). This can be considered as Fairly Valued.

Can you provide the profitability details for MGM RESORTS INTERNATIONAL?

MGM RESORTS INTERNATIONAL (MGM) has a profitability rating of 3 / 10.

What are the PE and PB ratios of MGM RESORTS INTERNATIONAL (MGM) stock?

The Price/Earnings (PE) ratio for MGM RESORTS INTERNATIONAL (MGM) is 15.09 and the Price/Book (PB) ratio is 3.35.

What is the financial health of MGM RESORTS INTERNATIONAL (MGM) stock?

The financial health rating of MGM RESORTS INTERNATIONAL (MGM) is 4 / 10.