Company Reports

On Sept. 24, Barry Diller's People announced it would not pursue the acquisition of the 73.9% of MGM Resorts it didn't own. Shares declined about 10% intraday.

MGM's Las Vegas (56% of 2025 EBITDAR) demand should rebound in 2026, supported by a stronger convention calendar and economic growth. Beyond 2026, MGM's Vegas resorts stand to benefit from the NCAA national football championship in 2027, while 2028 entertains the NCAA basketball Final Four and the start of the A's MLB team's relocation, with the Super Bowl in 2029, and a potential NBA expansion team in the future. Also, there have been very minimal industry supply additions in Vegas; this should support solid industry Strip occupancy, which stood at around 80% in 2025. Additionally, MGM’s casinos are positioned to benefit from multi-billion-dollar US sports betting and i-gaming markets, generating an estimated 12% of the company's 2030 sales (based on its 50% ownership of BetMGM) despite intense competition. However, the US doesn’t offer the long-term growth potential or regulatory barriers of Macao; thus, we do not believe the region contributes to a moat for MGM.

MGM's second-quarter revenue increased 1%, led by 3% growth in Las Vegas. Adjusted EBITDA decreased 6%, weighed down by competition in Macao and digital investments in overseas markets. MGM is reviewing the $48.30 per share cash offer from Barry Diller's People, which was announced in June.

On June 1, Barry Diller's People announced a cash offer of $18 billion, or $48.30 per share, for the 73.9% of MGM Resorts International that it doesn't own. The offer follows Diller's initial $1 billion investment in August 2020, when he touted MGM's omnichannel opportunity.

MGM's Las Vegas (56% of 2025 EBITDAR) demand should rebound starting in 2026, supported by a stronger convention calendar and maintained GDP-like growth. Beyond 2026, MGM's Vegas resorts stand to benefit from the NCAA national football championship in 2027, while 2028 entertains the NCAA basketball Final Four, the start of the A's MLB team's relocation, and a potential NBA expansion team. Also, there have been very minimal industry supply additions in Vegas this decade; this should support solid industry Strip occupancy, which stood at around 80% in 2025. Additionally, MGM’s casinos are positioned to benefit from multi-billion-dollar US sports betting and i-gaming markets, generating an estimated 12% of the company's 2030 sales (based on its 50% ownership of BetMGM) despite intense competition. However, the US doesn’t offer the long-term growth potential or regulatory barriers of Macao; thus, we do not believe the region contributes to a moat for MGM.

MGM's first-quarter sales increased 4%, with flat Vegas performance, Macao rising 9%, and US BetMGM up 6%. Adjusted EBITDA margin dropped to 13.2% from 14.9% due to one-time legal expenses.

MGM's Las Vegas (56% of 2025 EBITDAR) demand should rebound starting in 2026, supported by a stronger convention calendar and sustained GDP-like growth, with the addition of sports and entertainment options in the region. Also, there have been very minimal industry supply additions in Vegas this decade; this should support solid industry Strip occupancy, which stood at around 80% in 2025. Additionally, MGM’s casinos are positioned to benefit from multi-billion-dollar US sports betting and i-gaming markets, generating an estimated 13% of the company's 2030 sales (based on its 50% ownership of BetMGM) despite intense competition. However, the US doesn’t offer the long-term growth potential or regulatory barriers of Macao; thus, we do not believe the region contributes to a moat for MGM.

MGM's fourth-quarter revenue increased 6%, driven by 21% growth in Macao and despite a 3% decrease in Las Vegas. Total EBITDAR margins were essentially flat from a year ago at 31.1%.

A strong product offering and improved customization drove BetMGM's (50% owned by MGM) 2025 sales up 33%, with EBITDA margins increasing to about 8% from negative 12% in 2024. The company sees revenue between $3.1 billion to $3.2 billion in 2026, with EBITDA of $325 million at the midpoint.

MGM's Las Vegas (59% of 2024 EBITDAR) demand is being pressured near term by lower consumer sentiment amid uncertain US tariff policy, but we expect a rebound starting in 2026, helped by a stronger convention calendar and enduring GDP-like growth with the addition of sports and entertainment options in the region. Also, there have been very minimal industry supply additions in Vegas this decade; this should support solid industry Strip occupancy, which stood at around 90% in 2024. Additionally, MGM’s casinos are positioned to benefit from multi-billion-dollar US sports betting and i-gaming markets, generating an estimated 13% of the company's 2029 sales (based on its 50% ownership of BetMGM) despite intense competition. However, the US doesn’t offer the long-term growth potential or regulatory barriers of Macao; thus, we do not believe the region contributes to a moat for MGM.

MGM's third-quarter revenue increased 2%, as 17% growth in Macao more than offset the 7% decline in Vegas that was affected by renovations and weak visitation. EBITDA margin was11.9%, down from 13.7% a year ago.

While there are concerns of a near-term slowdown in economic growth in the US due to an uncertain tariff policy, MGM's Las Vegas (59% of 2024 EBITDAR) revenue remains flat and more than 150% above 2019's level, helped by the addition of sports and entertainment options in the region. Additionally, MGM’s casinos are positioned to benefit from multi-billion-dollar US sports betting and i-gaming markets, generating an estimated 18% of the company's 2029 sales (based on its 50% ownership of BetMGM and sole ownership of MGM Digital) despite intense competition. However, the US doesn’t offer the long-term growth potential or regulatory barriers of Macao; thus, we do not believe the region contributes to a moat for MGM. Still, there have been very minimal industry supply additions in Vegas this decade; this should support solid industry Strip occupancy, which stood at around 90% in 2024.

MGM's second-quarter sales increased 2%, propped up by 4%, 9%, and 36% growth at its regional, Macao, and BetMGM assets, respectively, but hindered by a 4% decrease in Vegas. Total adjusted EBITDA increased 2%.

MGM shares rose 8% during June 16 trading, after the firm's digital subsidiary, BetMGM, reported its quarter-to-date sales were near the 34% growth in the prior quarter. As a result, BetMGM increased its 2025 revenue guidance to $2.6 billion from $2.4 billion–$2.5 billion.

While there are concerns of a near-term slowdown in economic growth in the US due to an uncertain tariff policy, MGM's Las Vegas (59% of 2024 EBITDAR) revenue remains flat and more than 150% above 2019's level, helped by the addition of sports and entertainment options in the region. Additionally, MGM’s casinos are positioned to benefit from multi-billion-dollar US sports betting and i-gaming markets, generating an estimated 11% of the company's 2029 sales (based on its 50% ownership of BetMGM and sole ownership of MGM Digital) despite intense competition. However, the US doesn’t offer the long-term growth potential or regulatory barriers of Macao; thus, we do not believe the region contributes to a moat for MGM. Still, there have been very minimal industry supply additions in Vegas this decade; this should support solid industry Strip occupancy, which stood at around 90% in 2024.

Total revenue was down 2%, as tough comparisons weighed on Vegas results and slower economic growth pressured Macao, with sales in both regions down 3%. Against these pressures total EBITDA margin detracted to 14.9% from 15.4%.

We have adjusted our cost of equity assumptions for Wynn, Las Vegas Sands, and MGM due to their exposure to Macao, increasing geopolitical tensions between the US and China, and to harmonize with our assumptions for the Hong Kong-listed shares.

In late February, President Donald Trump added Macao to the list of “foreign adversary” countries, restricting the region from investing in US areas such as technology, infrastructure, and energy. In addition, Trump’s tariff war is moving the US further toward protectionism, a shift we see lasting for the foreseeable future. Also, the Macao market is highly regulated, and as a result, the pace and timing of growth are at the discretion of the government. As a result, we think investors are seeking an incremental risk premium for MGM's Macao exposure (20% of estimated EBITDAR by the end of 2030).

Although MGM's Las Vegas (59% of 2024 EBITDAR) revenue was flat in 2024, it was still more than 150% above 2019's level, helped by the addition of sports and entertainment options in the region. Additionally, MGM’s casinos are positioned to benefit from multi-billion-dollar sports betting and i-gaming markets, generating an estimated 16% of the company's 2029 sales (based on its 50% ownership of BetMGM and sole ownership of MGM Digital) despite intense competition. However, the US doesn’t offer the long-term growth potential or regulatory barriers of Macao; thus, we do not believe the region contributes to a moat for MGM. Still, there have been very minimal industry supply additions in Vegas this decade, and this should support solid industry Strip occupancy, which stood at around 90% in 2024.

Even though consolidated fourth-quarter revenue and EBITDA results were in line with our forecast, MGM’s shares increased by about 10% during Feb. 12 after-market trading. We attribute this to constructive commentary around Las Vegas demand in 2025 and the company’s aggressive share repurchase activity. We don’t plan any material changes to our 10-year Las Vegas, regional, or Macao estimates, but we may reduce our 2031-33 Japan sales forecast, which could decrease our $51 per share valuation by $1-$2.