10 Cheapest Stocks to Buy On Robinhood

7. MGM Resorts International (NYSE:MGM)

Market Cap: $11.255 billion

FWD PE Ratio: 14.73

Average Price Target Upside: 38.89%

MGM Resorts International (NYSE:MGM) owns and manages casino, hotel, and entertainment resorts across the U.S. and internationally. It operates through Las Vegas Strip Resorts, Regional Operations, and MGM China. Its properties feature gaming, hotels, dining, conventions, entertainment, retail, and other amenities. Casino offerings include slots, table games, online sports betting, and iGaming via BetMGM.

In the third quarter, while MGM Resorts (NYSE:MGM) missed analyst estimates in revenue and EPS, it delivered record-breaking numbers, including all-time highs in consolidated net revenue and adjusted property EBITDA at MGM China. Las Vegas saw a 1% revenue increase, a 2% rise in adjusted property EBITDAR, a 3% growth in average daily rate (ADR), and a 250 basis-point rise in occupancy, aided by $37 million in insurance proceeds related to a prior cybersecurity event. Regional properties achieved a 3% revenue increase and a 2% EBITDAR growth, supported by $15 million in insurance proceeds.

MGM China reported a 14% year-over-year revenue increase, a 5% rise in EBITDAR, and a 26% margin, with market share at 15%. BetMGM posted strong digital results, achieving profitability and a 70% rise in first-time depositors. International efforts included a joint venture with Grupo Globo in Brazil and preparations for launches in Osaka, New York, UAE, and Thailand.

Artisan Partners stated the following regarding MGM Resorts International (NYSE:MGM) in its Q3 2024 investor letter:

“We are always on the lookout for companies that are under pressure in some form or fashion as this can create the conditions for an attractive entry price. Though equity markets have made substantial gains over the past year, we have still found select opportunities to put capital to work. Q3 purchases included Warner Music Group, MGM Resorts International (NYSE:MGM) and Polaris.

MGM is a leading owner and operator of casinos in Las Vegas, at regional US locations, in China via its ~56% ownership of MGM China (Macau) and in the metaverse via iGaming and sports gambling app BetMGM. BetMGM is a 50% owned joint venture between Entain and MGM for online sports betting (OSB) and iGaming. Gaming is a good business. MGM generates a high-teens return on equity and consistent free cash flow. Free cash flow is used for stock buybacks and reinvestment into the business. We took advantage of the stock’s pullback in August when MGM reported earnings. Despite healthy results in Las Vegas and Macau, BetMGM continued to report losses, and there was cautious commentary about bookings ahead of the November Formula 1 race. Additionally, China macro concerns have been an overhang. The stock sells for about 13X FY1 earnings.”