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Are Investors Undervaluing MGM Resorts International (MGM) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is MGM Resorts International (MGM - Free Report) . MGM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 18.02 right now. For comparison, its industry sports an average P/E of 34.37. Over the past 52 weeks, MGM's Forward P/E has been as high as 98.54 and as low as 12.45, with a median of 18.05.

We also note that MGM holds a PEG ratio of 1.51. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MGM's PEG compares to its industry's average PEG of 2.11. MGM's PEG has been as high as 1.61 and as low as 1.40, with a median of 1.55, all within the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MGM has a P/S ratio of 0.91. This compares to its industry's average P/S of 1.02.

Finally, investors should note that MGM has a P/CF ratio of 7.96. 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 23.69. MGM's P/CF has been as high as 8.06 and as low as 2.75, with a median of 4.37, all within the past year.

These are only a few of the key metrics included in MGM Resorts International's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MGM looks like an impressive value stock at the moment.

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