MGM grew since its last quarterly release as predicted by AI but the following 1Q23 release is due on May 1st. Is MGM still a buy?
AI-powered tools enable investors to make informed decisions by analyzing vast amounts of data, identifying patterns, and spotting trends in real time. In recent times, our AI-driven analytics identified the potential of MGM Resorts International (MGM) and recommended it to investors. MGM Resorts is a multinational hospitality and entertainment company headquartered in Las Vegas, Nevada, USA. The company operates resorts, casinos, and hotels in various countries around the world, including the United States, China, and Japan. This recommendation resulted in an impressive 30.27% return on investment (ROI), underlining the value of AI in generating profitable investment choices. Currently, we are offering a limited-time opportunity to experience the power of AI analytics with a no-obligation 7-day risk-free trial for the Top 5 Starter Kit.
The emergence of artificial intelligence (AI) has brought a significant transformation in the investment world. In today's digital age, the power of artificial intelligence (AI) in providing real-time analytics has revolutionized the world of investing. The use of AI-powered tools enables investors to analyze vast amounts of data, identify patterns and trends, and make informed decisions in real time. Below you can see our signal for MGM, which was a stock pick for the 3-month (90-day) projection on January 4th, 2023. The opening price on the date of the forecast was $33.80 and closed at $44.03 making a rounded 30% profit for subscribers.
Growthtech.ai's analytics not only provides AI-based stock recommendations but also offer Signal Confidence (SC) to help investors gauge the likelihood of success for each prediction. The current stock prediction has an SC of 79%. While shorter-term projections can aid in identifying trends, they also carry increased risk. The AI system calculates the SC by factoring in the accuracy of past financial forecasts and current market variables affecting stock prices.
AI technology has transformed the way traders approach stock market investments. Growthtech.ai's AI system generates trading signals by analyzing years of daily market trends and validating them on recent data to ensure they are not biased or based on randomness. By separating predictable signals from stochastic noise, the AI creates a model capable of forecasting market trends in a multi-dimensional space.
Current Prospects for MGM
MGM Resorts has had to adapt to the changing landscape of the casino industry. In response to the growth of online gambling and the decline of traditional brick-and-mortar casinos, the company has focused on diversifying its offerings and expanding into new markets. For example, MGM has invested heavily in the development of integrated resorts in Asia, including the MGM Cotai in Macau and the MGM Grand Ho Tram in Vietnam. These properties offer a range of amenities beyond gambling, including shopping, dining, and entertainment, to attract a wider range of customers. Its Las Vegas resorts have marked the fifth straight quarter of record-high adjusted property earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR). The net revenue from MGM's Las Vegas resorts has shown an impressive 27% gain year over year, reaching $2.3 billion for the quarter. According to Chief Financial Officer Jonathan Halkyard, the demand for MGM's entertainment offerings in Las Vegas remains strong across all segments.
"We achieved exceptional results in the fourth quarter and remain optimistic in our outlook for this year. We are also focused on free cash flow and believe our company presents a compelling yield, especially when taking into account the value in our share price for excess cash, our ownership value of MGM China and BetMGM"
The company has also resumed operations in China, citing "tremendous opportunities for growth" outside of MGM's Las Vegas home turf, led by the Macau region. CEO Bill Hornbuckle has announced that guests have returned to MGM's China casinos "in force," similar to the Las Vegas market when COVID restrictions eased there. Hornbuckle anticipates a recovery in the Macau market to continue as the year progresses, and he outlined several initiatives to grow market share in the region. Despite enduring a net loss last quarter, the current emphasis has shifted to MGM China, where a spike in travel has been observed since the country lifted its COVID-19 protocols early this year. The combined properties of MGM China currently make up "the highest-earning businesses" within the company's portfolio. Similar to its Las Vegas resorts, non-gambling entertainment has raised visitor levels, particularly during the Lunar New Year holiday at the end of January.
Consolidated Results
MGM Resorts International reported consolidated net revenues of $3.6 billion, an increase of 18% compared to the prior year's quarter, driven by an increase in business volume and travel activity primarily at the Las Vegas Strip Resorts and Regional Operations. However, the company reported an operating loss of $2 million, compared to an operating income of $369 million in the prior year quarter, primarily due to a $1.2 billion increase in noncash amortization expense relating to the MGM Grand Paradise gaming sub-concession and an increase of $338 million of rent expense recorded within general & administrative expense related to the VICI and The Cosmopolitan leases, partially offset by a $1.1 billion gain on the disposition of The Mirage in the current quarter. Net income attributable to MGM Resorts was $284 million, impacted by the items affecting operating loss discussed above, compared to $131 million in the prior year quarter. Diluted earnings per share were $0.69 in the current quarter compared to $0.23 in the prior year quarter, while Adjusted diluted earnings per share ("Adjusted EPS") was a loss of $1.53 in the current quarter compared to Adjusted EPS of $0.12 in the prior-year quarter. The company reported a Consolidated Adjusted EBITDAR of $957 million in the current quarter.
Las Vegas Strip Resort
The Las Vegas Strip Resorts segment reported net revenues of $2.3 billion in the current quarter, an increase of 27% compared to the prior year's quarter, driven by the inclusion of The Cosmopolitan and an increase in business volume and travel activity. However, the segment's Adjusted Property EBITDAR margin decreased by 50 basis points primarily due to an increase in contribution from lower-margin non-gaming outlets and venues. Same-store net revenues (adjusted for acquisitions and dispositions) of $1.8 billion in the current quarter increased by 11% compared to the prior year quarter, while Adjusted Property EBITDAR of $877 million in the current quarter increased by 26% compared to the prior-year quarter. The Same-Store Adjusted Property EBITDAR of $691 million in the current quarter increased by 6% compared to the prior year's quarter.
Regional Operations
Regional Operations reported net revenues of $991 million in the current quarter, an increase of 10% compared to the prior year's quarter, driven by an increase in business volume. However, the Adjusted Property EBITDAR margin of 32.2% in the current quarter decreased by 215 basis points compared to the prior year's quarter due to an increase in contribution from lower-margin non-gaming outlets and venues and an increase in general and administrative expenses. Adjusted Property EBITDAR of $320 million in the current quarter increased by 3% compared to the prior year's quarter.
MGM China
Like many companies active in China, strict COVID-19 policies have led to difficult market conditions. MGM China reported net revenues of $175 million in the current quarter, a decrease of 44% compared to the prior year's quarter, due to a three-day COVID-19-related property closure at MGM Cotai and travel and entry restrictions in Macau. The segment reported an Adjusted Property EBITDAR loss of $55 million compared to Adjusted Property EBITDAR of $5 million in the prior year quarter.
MGM's decision not to pursue acquiring Entain to gain full ownership of BetMGM has been well received by investors and analysts as it removes some uncertainty from the company's outlook and allows MGM to focus on a highly profitable Macau market. With its CEO's optimistic outlook, record revenue results are likely to translate into record profits, which should ultimately reflect in the stock price. As the world begins to recover from the pandemic, there is significant potential for growth in the travel and tourism industry, which bodes well for MGM Resorts' future prospects. While there are some risks associated with investing in the company, such as regulatory and market factors, MGM Resorts offers a compelling opportunity for investors looking for exposure to the casino and hospitality industries. The company will be announcing its first quarter results for 2023 on May 1st, 2023. If you are wondering whether there is still a large enough potential profit margin to buy MGM stock now before the company announces 1Q23 results then you should consider subscribing to growthtech.ai.
MGM Stock Prediction
One of the main advantages of using stock predictive software is its ability to objectively study many assets throughout the day. By integrating big data analytics with our AI prediction system, we can enhance decision-making, forecasting, result modeling, and market understanding. Referred to officially as a Decision Support System (DSS), it is intended to help you increase precision, quicker decision-making, unbiased analysis, risk management, enhanced efficiency, and adaptability. These signals should not be used as your sole discretionary decision-making factor, but instead, act as an effective tool to drastically reduce the time it takes to find new market opportunities.
Take note that these stock predictions do not take into account elements like your trading background, individual aims, and ambitions, financial situation, or risk tolerance. So for example, here the AI is recommending MGM, and now you would do your own due diligence to come to your own conclusions based on your own personal considerations. This stock recommendation resulted in a significant 30.27% return on investment (ROI) in only 90 days and there are many more like it to help grow your portfolio with excellent opportunities.
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Sources: 1. MGM Resorts International Investor Relations, "MGM RESORTS INTERNATIONAL REPORTS FOURTH QUARTER AND FULL YEAR 2022 FINANCIAL AND OPERATING RESULTS" (2023)
2. MGM Resorts International Investor Relations, "MGM RESORTS INTERNATIONAL ANNOUNCES FIRST QUARTER 2023 EARNINGS RELEASE DATE"(2023)
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