* Note: Prices are in Million (M) USD.
Description:
MGM Resorts International is an American global hospitality and entertainment company operating destination resorts globally.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $1,958 M
Debt : $31,591 M
EBITDA : $2,257 M
Net Debt (Debt - Cash): $29,633 M
Since EBITDA cannot cover net debt within 3 years, Avoid This Stock.
This criteria used industry in which company operates:
Sector: Consumer cyclical
Industry: Resorts & casinos
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 19.46
Since Forward PE Ratio is between 15 - 20, 3 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $194 M
Average Revenue: $9,647 M
Revenue Converted To Free Cash Flow (%): 2.0%
Since Free Cash Flow (FCF) to Revenue percentage is less than 15, 1 point assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $17,241 M
Revenue 4 Years Ago (2020-12-31): $5,162 M
Last 5 Years Average Revenue Growth: 47%
Since Revenue Growth is greater than 20, 5 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $310 M
Share Count 5 Years Ago (2020-12-31): $494 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $2.89
Trailing 12-Month Earnings Per Share (EPS): $1.19
Average Earnings Per Share (EPS): $2.04
Dividend Per Share (DPS): $0
Payout Ratio: 0%
Dividend Yield: 0%
Since Dividend Per Share is less than or equal to 0, 0 point assigned.
Since Dividend Yield is less than 1, 0 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 4.2%
Since Average ROE is less than 10, 1 point assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $40
52-Week Low: $25
Threshold Price (15% Above 52-Week Low): $29
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $9,303 M
Since Market Cap is less than 10B, 1 point assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 2% exposure of Total Portfolio.
Value-Trade has assigned 17 points to above MGM Resorts International (MGM) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• Growth Based PE
46.00 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 10 Years Avg P/E (24.49)
× EPS ($2.04) = $49.96.
Last 10 Years Avg PE 24.49, Fair Value PE 12, Industry Based PE 20, Growth Based PE 46, RCFC Based PE 11.61, ROE Based PE 13.4, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 20.65. Value-Trades has assined P/E value 20.65. Since an average (Current Year EPS + Next Year EPS) earning per share is $2.04.
The fair value of MGM Resorts International (MGM) stock should be (20.65 x $2.04) = $42.14.
