Why Is MGM Resorts (MGM) Stock Rocketing Higher Today

What Happened?

Shares of hospitality and casino entertainment company MGM Resorts (NYSE:MGM) jumped 11.5% in the afternoon session after its joint venture, BetMGM, reported better-than-expected fiscal year 2025 results, showing a significant improvement in profitability and revenue. 

The sports betting operator, which is jointly owned with Entain, posted net revenue of $2.8 billion for the year, a 33% increase from the previous year. The company also reported a major turnaround in profitability, with earnings before interest, taxes, depreciation, and amortization (EBITDA) of $220 million, a substantial improvement from the previous year's loss. This strong performance allowed BetMGM to return $270 million in cash to its parent companies in the fourth quarter, marking its first significant return of capital. Looking ahead, the venture also provided a positive forecast, expecting net revenue to be between $3.1 billion and $3.2 billion for fiscal 2026.

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What Is The Market Telling Us

MGM Resorts’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. But moves this big are rare even for MGM Resorts and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 12 months ago when the stock gained 18.2% on the news that the company delivered solid fourth quarter results, surpassing analysts' EPS expectations while posting a slight revenue beat. 

Revenue growth was roughly flat year on year, primarily due to a 6% drop in Las Vegas Strip Resorts revenue, which faced a tough comparison against the prior year's Formula 1 event. However, strength in regional operations and MGM China helped offset some of this weakness, with regional casino revenue rising 7% and MGM China revenue increasing 4%. Margins were mixed. Adjusted EBITDA missed expectations by a wide margin, as lower earnings from the Las Vegas Strip weighed on overall profitability. However, steady performance in regional and international markets helped limit the downside. Despite this, adjusted EPS came in at $0.45, beating Wall Street expectations. Looking ahead, MGM remains optimistic about 2025, highlighting strong convention bookings and improved traction of its digital business. Overall, this was a strong quarter.

MGM Resorts is up 4.8% since the beginning of the year, and at $38.23 per share, it is trading close to its 52-week high of $40.37 from February 2025. Investors who bought $1,000 worth of MGM Resorts’s shares 5 years ago would now be looking at an investment worth $1,177.

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