We recently published a list of the 12 Best Hotel Stocks To Buy According to Analysts. In this article, we are going to take a look at where MGM Resorts International (NYSE:MGM) stands against other best hotel stocks to buy according to analysts.
Overview of the Hospitality Industry
The hospitality industry is undergoing a significant transformation after the post-Covid travel rebound. According to a report by Zion Market Research, the global hotel market is valued at $1.37 trillion as of 2023. It is expected to reach $2.99 trillion by 2032, growing at a compound annual growth rate of 9.14% between 2024 and 2032. This growth is attributed to the surging travel demand post-Covid, resurgence in leisure and business activities, and increased disposable incomes.
Released in January 2025, the “State of the Hospitality Market Report 2024” provides a deeper view of the global hospitality industry. The report showed a significant rise from $3.44 trillion in 2023 to $3.98 trillion in 2024, translating to a compound annual growth rate of 15.5%. This notable growth highlights positive trends across transportation and infrastructure improvements, the increasing influence of international hotel chains, and the growing popularity of experiential travel. In addition, the rising economic influence of the middle class in emerging markets and ballooning demand for unique experiences is further boosting this expansion. According to the report, North America is the most significant force in the hospitality market as of 2023. However, the Asia-Pacific region is anticipated to grow fastest in the coming years.
The US hospitality industry reflects similar trends. According to a report by Mordor Intelligence, the industry is estimated to have a market size of around $247.45 billion as of 2025. It is anticipated to grow at a compound annual growth rate of 4.87% between 2025 and 2030, reaching $313.87 billion by the end of the forecast period.
Increased Optimism Among US Hotel Investors
A survey regarding US hotel investors’ sentiment conducted by the CBRE Group and released on January 28 showed increased positive optimism among hotel investors. Around 94% of those surveyed expressed intentions to maintain or increase their hotel investments in 2025, a rise from 85% last year. The most prominent reason behind this growth was an optimistic outlook for total returns and distressed investment opportunities. The central business districts (CBDs) and resorts were the most commonly favored location types for 2025 among investors. The most popular chain scales were the higher-priced options.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 30 hotel stocks. We checked their upside potential, according to analysts, and then selected the top 12 most popular stocks among elite hedge funds as of Q3 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of analysts’ average upside potential. Please note that the analyst upside potential data is as of February 12, 2025.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Aerial shot of an entertainment resort, its buildings and gaming amenities sprawling along the seafront.
MGM Resorts International (NYSE:MGM)
Analyst Upside Potential: 48.60%
Number of Hedge Fund Holders: 46
MGM Resorts International (NYSE:MGM) is a global entertainment and gaming company that owns international and domestic locations. Its segments include Las Vegas Strip Resorts, MGM China, and Regional Operations. The Las Vegas Strip Resorts segment operates casino resorts, including MGM Grand Las Vegas, Mandalay Bay (including Delano and Four Seasons), Luxor, New York-New York (including The Park), and others. Its Regional Operations segment operates around 16 domestic casino properties.
The company reported 43% more bookings in December than in its prior record month, reflecting a promising trend for its operations. It also grew its market share to over 16% in December. MGM Resorts International (NYSE:MGM) sees considerable potential to grow in 2025, with all its properties live for a full year of bookings. It holds a sustainable market share driven by its focus on premium mass markets and strong product innovation teams.
MGM Resorts International (NYSE:MGM) also reported strong business in virtually every aspect of BetMGM, its online betting joint venture with Entain. It drove over $2 billion in top-line growth in net revenue from operations, accelerating from 6% in the first half of the year to 19% in the second half. Management expects this momentum to continue in 2025, with net revenues from operating reaching a range between $2.4 billion and $2.5 billion and EBITDA inflecting positive, representing an increase of approximately $250 million year-over-year.
Longleaf Partners Fund stated the following regarding MGM Resorts International (NYSE:MGM) in its Q4 2024 investor letter:
“MGM Resorts International (NYSE:MGM) – Hospitality and gaming company MGM Resorts was a top detractor for the quarter and the year. Despite relatively strong execution by the company and opportunistic repurchases of discounted shares, the market did not like the company’s quarter-to-quarter volatility, especially in the second half of the year. When making the necessary adjustments, MGM’s core Las Vegas properties continued to grow nicely if boringly in the low-mid-single digit range during the year. MGM remains one of our larger share repurchasers in the portfolio, demonstrating its commitment to shareholder returns. The company’s hidden assets in online gaming and Asia also showed progress as the year went on. We remain confident in the management team, led by CEO Bill Hornbuckle, as they navigate these challenges and focus on long-term value creation.”
Overall, MGM ranks 3rd on our list of best hotel stocks to buy according to analysts. While we acknowledge the potential of MGM, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MGM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
