Overall MGM gets a fundamental rating of 4 out of 10. We evaluated MGM against 132 industry peers in the Hotels, Restaurants & Leisure industry. While MGM seems to be doing ok healthwise, there are quite some concerns on its profitability. MGM has a decent growth rate and is not valued too expensively.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year MGM was profitable.
In the past year MGM had a positive cash flow from operations.
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

With a Return On Assets value of 0.16%, MGM is not doing good in the industry: 62.41% of the companies in the same industry are doing better.
With a Return On Equity value of 2.48%, MGM perfoms like the industry average, outperforming 57.89% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 2.82%, MGM is doing worse than 63.16% of the companies in the same industry.

		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

Looking at the Profit Margin, with a value of 0.38%, MGM is doing worse than 61.65% of the companies in the same industry.
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 of 44.65%. This is comparable to the rest of the industry: MGM outperforms 43.61% of its industry peers.
In the last couple of years the Gross Margin of MGM has grown nicely.

		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
The debt/assets ratio for MGM is higher compared to a year ago.

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.
MGM's Altman-Z score of 0.77 is on the low side compared to the rest of the industry. MGM is outperformed by 69.92% of its industry peers.
The Debt to FCF ratio of MGM is 4.70, which is a neutral value as it means it would take MGM, 4.70 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.70, MGM is in the better half of the industry, outperforming 75.94% 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 47.37% of the companies in the same industry.

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

ROIC/WACC0.35

WACC8.12%

2.3 Liquidity

MGM has a Current Ratio of 1.23. 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 Current ratio (1.23) than 63.91% of its industry peers.
A Quick Ratio of 1.19 indicates that MGM should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.19, MGM is doing good in the industry, outperforming 65.41% of the companies in the same industry.

		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%.
Measured over the past years, MGM shows a very strong growth in Earnings Per Share. The EPS has been growing by 65.28% on average per year.
The Revenue has been growing slightly by 0.05% in the past year.
The Revenue has been growing slightly by 5.97% on average over the past years.

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.
MGM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.76% yearly.

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

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 15.68, the valuation of MGM can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of MGM indicates a somewhat cheap valuation: MGM is cheaper than 79.70% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of MGM to the average of the S&P500 Index (27.21), we can say MGM is valued slightly cheaper.
The Price/Forward Earnings ratio is 14.88, which indicates a correct valuation of MGM.
74.44% of the companies in the same industry are more expensive than MGM, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, MGM is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	15.68
Fwd PE	14.88

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MGM indicates a rather cheap valuation: MGM is cheaper than 91.73% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MGM indicates a rather cheap valuation: MGM is cheaper than 96.24% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	6.8
EV/EBITDA	5.88

4.3 Compensation for Growth

PEG (NY)N/A

PEG (5Y)0.24

EPS Next 2Y-6.04%

EPS Next 3Y4.2%

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5. Dividend

5.1 Amount

MGM has a yearly dividend return of 0.02%, which is pretty low.
MGM's Dividend Yield is comparable with the industry average which is at 1.21.
Compared to an average S&P500 Dividend Yield of 1.81, 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 15.68 and the Price/Book (PB) ratio is 3.48.

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

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