Stock Analysis | Mgm Resorts International Outlook - A Bearish Setup Amid Mixed Analysts and Strong Cash Flow

Market Snapshot

Takeaway: Mgm Resorts International (MGM) is currently facing a bearish technical outlook with an internal diagnostic score of 1.0 out of 10, while the stock has seen a 4.61% price increase over the last five days.

News Highlights

Recent news has been mixed, with some developments potentially affecting the hospitality and restaurant sectors. Here are a few key items:

• Target Hospitality Earnings Report: On May 19, Target Hospitality reported its first-quarter results and emphasized its strategic growth pipeline. While not directly related to MGM, the company’s ability to compete in the hospitality industry highlights the sector's dynamics.
• Trade Tariffs: On May 30, news emerged about new tariffs on Canada, Mexico, and China. These could increase costs for restaurants and hospitality businesses, including MGM, especially if the supply chains are affected.
• Industry Expansion: InterContinental Hotels & Resorts announced its first property in Ecuador, set to open in 2027. While this is a luxury brand, it shows ongoing interest and expansion in the hospitality space, which could have indirect implications for MGM’s competitive landscape.

Analyst Views & Fundamentals

Mgm Resorts International has received a range of analyst ratings recently. The simple average rating stands at 4.00, while the weighted rating—taking into account past performance—is much lower at 2.18.

Analyst Consistency: Analyst opinions are not in strong agreement, with ratings split across "Strong Buy," "Buy," and "Neutral." This dispersion suggests uncertainty among professionals about the stock’s near-term trajectory.

Price vs. Analyst Expectations: The stock is currently rising, but the market’s weighted expectations are relatively neutral. This mismatch indicates that while analysts are cautious, the stock price is trending upward, potentially due to market sentiment or unrelated macroeconomic factors.

Fundamental Insights: Key financial metrics and internal diagnostic scores include:

• Return on Assets (ROA): 1.99% (internal diagnostic score: 2.0)
• Net Income to Revenue: 3.38% (score: 2.0)
• Profit Margin vs. Market Value (Profit-MV): -31.43% (score: 0.0)
• Operating Cash Flow to Assets (CFOA): 1.55% (score: 1.0)
• Gross Profit to Assets (GPOA): 4.70% (score: 0.0)
• Total Profit YoY Growth: -34.83% (score: 0.0)
• Cash to Market Value (Cash-MV): 48.93% (score: 1.0)
• Inventory Turnover Days: 5.05 days (score: 2.0)
• Long-Term Debt to Working Capital Ratio: 50.32% (score: 1.0)
• Cash Usage (Cash-UP): 20.51% (score: 0.0)

Money-Flow Trends

The fund-flow data shows a mixed picture, with large and extra-large investors showing negative trends, while retail investors (small) are positive. Here’s a breakdown:

• Small investors: 50.30% inflow ratio, positive trend
• Medium investors: 49.58% inflow ratio, negative trend
• Large investors: 50.20% inflow ratio, positive trend
• Extra-large investors: 48.91% inflow ratio, negative trend
• Overall inflow ratio: 49.43%, with a negative overall trend

The stock’s fund-flow score is 7.81 (internal diagnostic score out of 10), indicating that the stock has relatively good inflows at the institutional level despite the bearish technical indicators.

Key Technical Signals

Technically, Mgm Resorts International is in a weak position with an internal diagnostic score of 1.0 out of 10. Here’s what’s driving the bearish signals:

• MACD Golden Cross: Internal diagnostic score of 1.0 — a bearish sign historically associated with an average return of -1.46%.
• Williams %R Overbought: Score of 1.0 — has shown an average return of -1.42% in historical signals.
• Bearish Engulfing: Score of 1.0 — historically linked to an average return of -0.24%.

Recent Chart Patterns:

• August 13: WR Overbought
• August 14: WR Overbought
• August 15: Bearish Engulfing
• August 18: WR Overbought
• August 19: WR Overbought and MACD Golden Cross

The combination of overbought conditions and bearish candlestick patterns suggests a lack of bullish momentum and a high probability of a downward correction.

Momentum Quality: The technical indicators are overwhelmingly bearish (3 out of 3), and the recent five-day trend is weak. Traders should be cautious and consider avoiding entry at this point due to the risk of further declines.

Conclusion

Mgm Resorts International is currently facing a bearish setup with strong negative signals in both technical analysis and fundamentals. While institutional investors have shown a relatively strong inflow, the stock’s fundamentals and technical indicators do not align with the recent price rise. Traders should be cautious and consider avoiding new long positions at this time. Watch for any bearish breakouts or key support levels to be tested, and consider waiting for a pull-back before making decisions.