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Should Value Investors Buy MGM Resorts International (MGM) Stock?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is MGM Resorts International (MGM - Free Report) . MGM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 13.85 right now. For comparison, its industry sports an average P/E of 29.45. MGM's Forward P/E has been as high as 23.60 and as low as 12.45, with a median of 17.45, all within the past year.
We also note that MGM holds a PEG ratio of 0.89. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MGM's industry has an average PEG of 1.85 right now. MGM's PEG has been as high as 1.97 and as low as 0.89, with a median of 1.56, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MGM has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.07.
Finally, investors should note that MGM has a P/CF ratio of 7.60. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. MGM's current P/CF looks attractive when compared to its industry's average P/CF of 23.87. Over the past 52 weeks, MGM's P/CF has been as high as 8.95 and as low as 2.75, with a median of 4.60.
These figures are just a handful of the metrics value investors tend to look at, but they help show that MGM Resorts International is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MGM feels like a great value stock at the moment.
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Should Value Investors Buy MGM Resorts International (MGM) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is MGM Resorts International (MGM - Free Report) . MGM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 13.85 right now. For comparison, its industry sports an average P/E of 29.45. MGM's Forward P/E has been as high as 23.60 and as low as 12.45, with a median of 17.45, all within the past year.
We also note that MGM holds a PEG ratio of 0.89. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MGM's industry has an average PEG of 1.85 right now. MGM's PEG has been as high as 1.97 and as low as 0.89, with a median of 1.56, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MGM has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.07.
Finally, investors should note that MGM has a P/CF ratio of 7.60. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. MGM's current P/CF looks attractive when compared to its industry's average P/CF of 23.87. Over the past 52 weeks, MGM's P/CF has been as high as 8.95 and as low as 2.75, with a median of 4.60.
These figures are just a handful of the metrics value investors tend to look at, but they help show that MGM Resorts International is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MGM feels like a great value stock at the moment.