MGM Climbs as Earnings Get Lift From China and Strong Growth Expectations Buoy the Stock

MGM Resorts International (MGM) shares surged on the heels of its fourth-quarter earnings report, which highlighted robust growth in its Chinese operations and strong growth expectations for the future. The company's earnings and revenue beat analysts' estimates, driving investor confidence in its long-term prospects.

MGM Resorts reported record full-year consolidated net revenues of $17.2 billion, up 7% from the prior year, driven by a 25% increase in Segment Adjusted EBITDAR for MGM China. The company's digital expansion, particularly through BetMGM, also contributed to its growth, with a 15% year-over-year revenue increase in the fourth quarter. (Source: MGM Resorts International, February 12, 2025)



MGM China's record full-year Segment Adjusted EBITDAR of $1.1 billion, an increase of 25% from the prior year, was a significant driver of the company's overall growth. This growth was driven by favorable market conditions in Macau, with revenues in the Chinese segment increasing by 28%. (Source: MGM Resorts International, February 12, 2025)

MGM Resorts' strong growth expectations are buoyed by its digital expansion and geographical diversification. The company expects BetMGM to be profitable in 2025, and it is exploring opportunities in emerging markets such as the UAE and Brazil. Additionally, MGM Resorts is planning new developments in Osaka, Japan, and potentially in Thailand, further enhancing its long-term investment potential. (Source: MGM Resorts International, various news releases)



MGM Resorts' asset-light business model and effective capital allocation have also contributed to its strong performance. The company has reduced shares outstanding by more than 40% since 2021 through share repurchases, accelerating free cash flow per share generation for shareholders. (Source: MGM Resorts International, February 12, 2025)



In conclusion, MGM Resorts' strong earnings and growth expectations, driven by its digital expansion, geographical diversification, and effective capital allocation, have buoyed the company's stock. As the company continues to execute on its strategic priorities and capitalize on emerging opportunities, investors can expect MGM to maintain its momentum in the face of changing market dynamics.