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Why Is MGM (MGM) Up 43.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for MGM Resorts (MGM - Free Report) . Shares have added about 43.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MGM due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
MGM Resorts Posts Narrower-than-Expected Loss in Q2
MGM Resorts reported mixed second-quarter 2020 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues lagged the same. While the bottom line beat the consensus mark after missing in the preceding two quarters, the top line lagged the estimate for the fifth consecutive quarter.
Closure of the company’s properties owing to the coronavirus pandemic negatively impacted the results. The company started reopening its properties across the United States during the second quarter. Ever since then, it has witnessed better-than-expected demand. The company is optimistic regarding its long-term growth potential.
Earnings & Revenues Discussion
MGM Resorts reported adjusted loss per share of $1.52, narrower than the Zacks Consensus Estimate of a loss of $1.65. In the prior-year quarter, the company had reported adjusted earnings per share of 23 cents.
Total revenues were $289.8 million, which missed the Zacks Consensus Estimate of $443 million. Moreover, the top line declined 91% year over year. The downside can primarily be attributed to the temporary shutdown of the company’s domestic operations and other restrictions in Macau owing to the coronavirus pandemic. Moreover, travel restrictions impacted the company’s performance in the quarter under review. MGM China
MGM China’s net revenues declined 95% year over year to $33 million, owing to travel and entry restrictions in Macau, and other operational restrictions related to the coronavirus pandemic. VIP Table Games Hold adjusted MGM China net revenues plunged 96% year over year to $32 million.
MGM China’s adjusted property EBITDAR (Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs) loss was $116 million. In the prior-year quarter, the company had reported adjusted property EBITDAR of $173 million.
Domestic Operations
Net revenues at Las Vegas Strip Resorts during the second quarter were $151 million, down 90% year over year. Adjusted property EBITDAR loss of $104 million compared unfavorably with adjusted property EBITDAR of $418 million in the prior-year quarter. However, adjusted property EBITDAR margin expanded 450 basis points year over year.
During quarter under review, net revenues from the company's regional operations totaled $89 million, down 90% from the prior-year quarter. Adjusted property EBITDAR came in at a loss of $112 million. In the prior-year quarter, the company had reported adjusted property EBITDAR of $261 million. However, adjusted property EBITDAR margin expanded 880 basis points year over year.
Casino revenues in the quarter under review fell 80% year over year at the company's Las Vegas Strip Resorts primarily due to coronavirus-induced shutdowns and other operational restrictions on account of the pandemic. Moreover, slots handle declined 83%. Notably, slots handle decreased 92% at its Regional Operations.
Balance Sheet
MGM Resorts ended the second quarter with cash and cash equivalents of $4,835.5 million compared with $2,329.6 million on Dec 31, 2019. The company’s long-term debt at the end of quarter stands at $11,339.6 million, compared with $11,168.9 million as of Dec 31, 2019.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -19.89% due to these changes.
VGM Scores
Currently, MGM has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, MGM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is MGM (MGM) Up 43.4% Since Last Earnings Report?
It has been about a month since the last earnings report for MGM Resorts (MGM - Free Report) . Shares have added about 43.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MGM due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
MGM Resorts Posts Narrower-than-Expected Loss in Q2
MGM Resorts reported mixed second-quarter 2020 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues lagged the same. While the bottom line beat the consensus mark after missing in the preceding two quarters, the top line lagged the estimate for the fifth consecutive quarter.
Closure of the company’s properties owing to the coronavirus pandemic negatively impacted the results. The company started reopening its properties across the United States during the second quarter. Ever since then, it has witnessed better-than-expected demand. The company is optimistic regarding its long-term growth potential.
Earnings & Revenues Discussion
MGM Resorts reported adjusted loss per share of $1.52, narrower than the Zacks Consensus Estimate of a loss of $1.65. In the prior-year quarter, the company had reported adjusted earnings per share of 23 cents.
Total revenues were $289.8 million, which missed the Zacks Consensus Estimate of $443 million. Moreover, the top line declined 91% year over year. The downside can primarily be attributed to the temporary shutdown of the company’s domestic operations and other restrictions in Macau owing to the coronavirus pandemic. Moreover, travel restrictions impacted the company’s performance in the quarter under review.
MGM China
MGM China’s net revenues declined 95% year over year to $33 million, owing to travel and entry restrictions in Macau, and other operational restrictions related to the coronavirus pandemic. VIP Table Games Hold adjusted MGM China net revenues plunged 96% year over year to $32 million.
MGM China’s adjusted property EBITDAR (Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs) loss was $116 million. In the prior-year quarter, the company had reported adjusted property EBITDAR of $173 million.
Domestic Operations
Net revenues at Las Vegas Strip Resorts during the second quarter were $151 million, down 90% year over year. Adjusted property EBITDAR loss of $104 million compared unfavorably with adjusted property EBITDAR of $418 million in the prior-year quarter. However, adjusted property EBITDAR margin expanded 450 basis points year over year.
During quarter under review, net revenues from the company's regional operations totaled $89 million, down 90% from the prior-year quarter. Adjusted property EBITDAR came in at a loss of $112 million. In the prior-year quarter, the company had reported adjusted property EBITDAR of $261 million. However, adjusted property EBITDAR margin expanded 880 basis points year over year.
Casino revenues in the quarter under review fell 80% year over year at the company's Las Vegas Strip Resorts primarily due to coronavirus-induced shutdowns and other operational restrictions on account of the pandemic. Moreover, slots handle declined 83%. Notably, slots handle decreased 92% at its Regional Operations.
Balance Sheet
MGM Resorts ended the second quarter with cash and cash equivalents of $4,835.5 million compared with $2,329.6 million on Dec 31, 2019. The company’s long-term debt at the end of quarter stands at $11,339.6 million, compared with $11,168.9 million as of Dec 31, 2019.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -19.89% due to these changes.
VGM Scores
Currently, MGM has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, MGM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.