Bear of the Day: MGM Resorts International (MGM)

Core Insights - MGM Resorts International has experienced a 14% decline in stock value over the past year, contrasting with a 16% increase in the S&P 500, indicating long-term underperformance [1][5] - The company reported a net loss of $285 million in Q3, primarily due to a non-cash goodwill impairment charge of $256 million related to the withdrawal of a commercial gaming license application for Empire City [3][4] - MGM's Q3 revenue grew by approximately 2% to $4.3 billion, largely driven by growth in MGM China, but revenue from resorts on the Las Vegas Strip fell by about 7% [3][4] Financial Performance - The consensus FY25 earnings estimate for MGM Resorts has decreased by 16% over the past two months, with the FY26 Zacks Consensus Estimate down by 26% [4] - The company's recent negative EPS revisions have resulted in a Zacks Rank of 5 (Strong Sell) [4] Strategic Insights - CFO Jonathan Halkyard noted signs of stability in Las Vegas due to the return of group and convention activities and the completion of the MGM Grand room remodel [5] - The decision to sell MGM Northfield Park operations was driven by a focus on premium integrated resort operations, reflecting a solid multiple and highlighting the value gap in MGM Resorts' equity price [5] Market Position - Despite being a major player in the casino and resort industry with a portfolio of around 30 unique destinations, MGM stock has only increased by 35% over the last decade, while the S&P 500 has surged by 240% [5]