Stock Analysis & Valuation MGM Resorts International (MGG.DE)

• Previous Close: €37.48
• Sector Valuation Confidence Level: High

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	4.50	-88
Graham Formula	30.00	-20

Strategic Investment Analysis

Company Overview

MGM Resorts International (MGG.DE) is a leading global hospitality and entertainment company headquartered in Las Vegas, Nevada. Specializing in casino resorts, MGM operates in two primary segments: domestic resorts in the U.S. and MGM China, which includes properties in Macau. The company's integrated resorts offer a comprehensive experience featuring gaming, luxury hotels, world-class dining, entertainment, and retail amenities. With iconic properties such as the MGM Grand and Bellagio in Las Vegas, MGM Resorts has established itself as a dominant player in the gaming and hospitality industry. The company also owns premier golf courses, including the Primm Valley Golf Club and Fallen Oak. MGM Resorts is listed on the Deutsche Börse (XETRA) and serves as a key player in the Communication Services sector, specifically within the Entertainment industry. Its diversified revenue streams and strong brand recognition position it well in both domestic and international markets.

Investment Summary

MGM Resorts International presents a high-risk, high-reward investment opportunity due to its exposure to the cyclical gaming and hospitality industry. The company's strong revenue base (€17.24B in FY 2023) and diversified operations across the U.S. and Macau provide resilience against regional downturns. However, its high beta (2.249) indicates significant volatility, and its substantial total debt (€31.85B) raises concerns about financial leverage. The lack of dividends may deter income-focused investors, but strong operating cash flow (€2.36B) suggests potential for reinvestment and growth. Investors should weigh MGM's market leadership against macroeconomic risks, including regulatory changes in gaming markets and tourism fluctuations.

Competitive Analysis

MGM Resorts International competes in a highly competitive global gaming and hospitality market. Its competitive advantages include a strong brand portfolio, diversified revenue streams (gaming, hotels, entertainment), and strategic locations in Las Vegas and Macau. The company's scale allows for cost efficiencies in operations and marketing, while its focus on non-gaming amenities (dining, shows, retail) reduces reliance on pure casino revenue. However, MGM faces intense competition from other integrated resort operators, particularly in Macau, where regulatory and geopolitical risks are heightened. Domestically, its Las Vegas properties compete with Caesars Entertainment and Wynn Resorts, while in Asia, rivals like Las Vegas Sands and Galaxy Entertainment dominate. MGM’s high debt load could limit flexibility compared to more conservatively financed competitors. The company’s ability to innovate in digital gaming and sports betting could be a future differentiator.

Major Competitors

• Caesars Entertainment (CZR): Caesars Entertainment is a major competitor in the U.S. gaming market, with a strong presence in Las Vegas and regional casinos. Its loyalty program, Caesars Rewards, is a key strength, driving customer retention. However, Caesars has faced financial restructuring in the past, and its international footprint is smaller than MGM’s. The company is aggressively expanding into sports betting, posing direct competition to MGM’s digital gaming initiatives.
• Wynn Resorts (WYNN): Wynn Resorts operates luxury integrated resorts in Las Vegas and Macau, competing directly with MGM’s high-end properties. Wynn’s focus on premium customer experiences gives it an edge in the luxury segment, but its smaller scale limits diversification. The company’s heavy reliance on Macau exposes it to regulatory risks, similar to MGM China.
• Las Vegas Sands (LVS): Las Vegas Sands is a global leader in integrated resorts, with dominant positions in Macau and Singapore. Its strong balance sheet and extensive non-gaming revenue streams make it a formidable competitor. However, Sands exited the Las Vegas market, reducing direct competition with MGM domestically. Its Asia-centric model is both a strength and a vulnerability due to geopolitical risks.
• Galaxy Entertainment Group (GXYEY): Galaxy Entertainment is a key player in Macau, competing directly with MGM China. Its Cotai Strip properties are among the most profitable in the region. Galaxy’s strong local partnerships provide regulatory advantages, but its lack of U.S. presence limits diversification compared to MGM.