MGM Resorts International (MGM) is positioned for outperformance amid a recovery in global leisure demand and strategic asset optimization. Rising occupancy rates, premium pricing power, and expanding international exposure are key drivers underpinning a bullish investment thesis.
- MGM’s Las Vegas ADR reached $287 in Q4 2025, up 12% YoY
- EBITDA margins projected at 41% for 2026, up from 37% in 2023
- MGM Macao generated $1.6 billion in revenue in 2025, a 24% YoY increase
- Forward P/E of 14.3, below the S&P 500 average of 17.8
- Projected free cash flow of $1.3 billion in 2026
- Net debt reduced to $12.7 billion as of December 2025
MGM Resorts International (MGM) is emerging as a compelling long-term investment as its portfolio demonstrates resilience and scalability across high-margin gaming and hospitality segments. With a market capitalization exceeding $50 billion and a diversified footprint including iconic properties in Las Vegas, Macau, and Boston, the company is leveraging its brand strength to capture premium consumer spending. Recent operational metrics show an average daily room rate (ADR) of $287 in Las Vegas during Q4 2025, up 12% year-over-year, reflecting sustained pricing power amidst elevated demand. The company’s strategic shift toward premium, experience-driven offerings has translated into stronger EBITDA margins—projected at 41% for 2026, up from 37% in 2023. This improvement is fueled by cost discipline, reduced reliance on promotional discounts, and the successful integration of new entertainment ventures like the MGM Grand’s expanded live entertainment complex. Additionally, MGM’s international expansion, particularly through its 51% stake in MGM Macao, has delivered $1.6 billion in revenue in 2025, marking a 24% increase from the prior year amid a rebound in Chinese outbound travel. Investor sentiment has begun to reflect these fundamentals, with MGM’s stock trading at a forward P/E of 14.3, below the S&P 500’s 17.8 multiple. This valuation gap, coupled with a dividend yield of 2.1%, suggests potential for both capital appreciation and income generation. Analysts tracking the stock have upgraded their ratings, with 18 of 24 covering firms now rating MGM as a 'Buy' or 'Outperform'. The broader sector remains supportive, as consumer spending on leisure and travel continues to recover, with U.S. leisure expenditures increasing by 8.4% in 2025. MGM’s ability to deliver consistent cash flow—projected at $1.3 billion in free cash flow for 2026—enhances its capacity to invest in growth projects and reduce net debt, which stood at $12.7 billion as of December 2025.