MGM Resorts (NYSE:MGM) has fared far better than top competitor casinos Las Vegas Sands (NYSE:LVS), Wynn Resorts (NASDAQ:WYNN), and Melco Resorts (NASDAQ:MLCO) throughout the post-pandemic recovery. Ironically, MGM stock (NYSE:MGM) is down 25% on the year, behind Las Vegas Sands, which is up 10%.
The Lifting of Restrictions in Macau Boosts Casino Stocks.
China has indicated that it would reopen Macau to tour groups, despite its zero-tolerance COVID-19 policy. Regulators have announced the return of Mainland tour groups and the issuance of IVS eVisas to Macau to support the island’s economy. Macau generates over 90% of its income from the 27.9 million Mainland visitors, and restrictions are anticipated to be relaxed by November. Casino stocks with a significant concentration in Macau have surged in the last two weeks, propelling LVS stock into the green. MGM still has a 10% market share, and Macau accounts for 7% of its overall income, so a rebound bodes well for MGM stock.
MGM Stock: Baby, Vegas is Back!
Las Vegas is back, and MGM stock (NYSE:MGM) is benefiting from it while being less vulnerable to COVID shutdowns in Macau than rivals Wynn and Las Vegas Sands. Hotel occupancy rates in Las Vegas have returned to 90%, while the Company has only filled around 2,000 of the 5,000 employment opportunities it has. BetMGM’s mobile and online sportsbook and its igaming app continue to acquire market share against rivals like DraftKings (NASDAQ:DKNG) and Penn Entertainment (NASDAQ:PENN).
MGM Stock: Market Analysis
MGM published their Q2 2022 profits for the quarter ending June 2022 on August 3, 2022. The Company announced an earnings-per-share result of $0.03, falling short of average analyst projections of $0.33, a (-$0.30) miss. Revenues increased 44% year on year (YoY) to $3.26 billion, above analyst expectations of $3.03 billion. In the current quarter, the consolidated adjusted EBITDAR was $920 million, with a consolidated adjusted EBITDAR margin of 28.2%. For $450 million, the Company purchased The Cosmopolitan of Las Vegas and sold the operations of Gold Strike Tunica. Same-store sales increased by over 60% year on year. The Company repurchased $1.1 billion in common stock or 8% of all outstanding shares. MGM is looking for gambling licenses in New York and plans to build an integrated resort in Osaka, Japan.
Positive CEO Remarks
Bill Hornbuckle, CEO of MGM, stated, “Our second quarter results were outstanding, representing the best second quarter Adjusted Property EBITDAR at the Company’s Las Vegas Strip Resorts and the best second quarter Adjusted Property EBITDAR at our Regional Operations, driven by consistent strong leisure consumer demand and a return from our convention customers… We are optimistic about the future since our convention and event schedule for the next year remains impressive, and BetMGM is a market leader with a growth strategy. We are committed to realizing our objective of being the world’s leading gaming entertainment organization.”
Featured Image- Unsplash @ Kevin Dunlap
Author Okoro Chinedu 
