Investment Thesis
MGM demonstrates solid operational cash generation and interest coverage, but concerning profitability trends and high leverage limit upside potential. The company faces challenging fundamentals with declining EPS despite revenue growth, suggesting margin pressure and operational headwinds in its hospitality segment.
MGM Strengths
- Strong free cash flow generation of $1.5B with 8.3% FCF margin providing financial flexibility
- Healthy interest coverage ratio of 9.1x indicating manageable debt service capability
- Adequate liquidity with current ratio of 1.23x and $2.1B cash position
MGM Risks
- High financial leverage with debt-to-equity ratio of 2.56x constraining financial flexibility and increasing distress risk
- Declining profitability with net income down 2.5% YoY and diluted EPS collapsing 68.3% despite revenue growth, indicating significant margin compression
- Thin net margin of 1.2% and low ROA of 0.5% reflect capital-intensive business model with limited returns on assets
Key Metrics to Watch
- Operating margin trend and ability to maintain or expand margins amid competitive pressures
- Debt reduction progress and debt-to-equity ratio movement toward healthier leverage levels
- Same-store revenue and occupancy rates as leading indicators of operational performance
MGM Financial Metrics
MGM Profitability Ratios
MGM Balance Sheet & Liquidity
MGM 5-Year Financial Trend
5-Year Trend Summary: MGM Resorts International's revenue has grown significantly by 36% over the 5-year period, indicating strong business expansion. The most recent EPS of $3.19 reflects profitable operations.
MGM Growth Metrics (YoY)
MGM Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $4.2B | -$87.8M | $-0.32 |
| Q2 2025 | $4.3B | $49.0M | $0.18 |
| Q1 2025 | $4.3B | $148.6M | $0.51 |
| Q3 2024 | $4.0B | $161.1M | $0.46 |
| Q2 2024 | $3.9B | $187.1M | $0.55 |
| Q1 2024 | $3.9B | $217.5M | $0.67 |
| Q3 2023 | $3.4B | $161.1M | $0.46 |
| Q2 2023 | $3.3B | $200.8M | $0.55 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
MGM Capital Allocation
MGM SEC Filings
Access official SEC EDGAR filings for MGM Resorts International (CIK: 0000789570)