MGM Resorts to Post Q1 Earnings: What's in the Cards for the Stock?

MGM Resorts International MGM is scheduled to report first-quarter 2025 results on April 30.

MGM’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 21.8%. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)

Trend in Estimate Revision of MGM

The Zacks Consensus Estimate for first-quarter earnings per share (EPS) is pegged at 50 cents, indicating a deterioration of 32.4% from 74 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at nearly $4.27 billion, suggesting a decline of 2.5% from the prior-year quarter’s figure.

MGM Resorts International Price and EPS Surprise

MGM Resorts International price-eps-surprise | MGM Resorts International Quote

Let's look at how things have shaped up in the quarter.

Factors Likely to Shape MGM Resorts’ Quarterly Results

MGM Resorts’ first-quarter performance is expected to have benefited from robust domestic demand trends and sustained strength in digital expansion. Solid Las Vegas operations, strategic convention bookings and growth at BetMGM and MGM Digital are likely to have supported the company’s performance in the to-be-reported quarter.

Strong event-driven demand around the Super Bowl and January conventions is likely to have contributed positively in the first quarter. The company expects Las Vegas operations' Average Daily Rates to grow mid-single-digit (excluding Super Bowl-related headwinds), buoyed by record January occupancy levels (94%).

MGM’s strong group bookings pipeline, boosted by its Marriott collaboration and revamped Mandalay Bay Convention Center, is likely to have aided its performance in the first quarter. The company’s regional properties also appear poised for steady cash flow generation, aided by portfolio enhancements and efficient cost management initiatives. The Zacks Consensus Estimate for first-quarter revenues from regional operations rooms is pegged at $67 million compared with $66 million reported in the prior-year quarter.

However, persistent macroeconomic challenges, including inflationary pressures, competitive labor markets and foreign currency fluctuations, are likely to have weighed on the company’s performance in the first quarter.

Soft contributions from casino, rooms and food and beverage are expected to get reflected in the company’s performance in the quarter to be reported. The Zacks Consensus Estimate for first-quarter revenues from casino, rooms and food and beverage is estimated at $2.2 billion, $937 million and $740 million, respectively, compared with $2.24 billion, $956 million and $769 million reported in the prior-year quarter.

Elevated pre-opening costs tied to MGM Grand hotel renovations and international expansion expenses, particularly in Brazil through MGM Digital, are likely to have exerted some margin pressure in the quarter under review. Additionally, first-quarter Las Vegas EBITDAR growth may have been impacted by the estimated $65 million year-over-year Super Bowl headwind and temporary room disruptions from the Grand renovation project.

What Our Model Says About MGM Stock

Our proven model does not conclusively predict an earnings beat for MGM Resorts this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. However, that's not the case here.

MGM’s Earnings ESP: MGM Resorts has an Earnings ESP of +5.97%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

MGM’s Zacks Rank: The company currently has a Zacks Rank #4 (Sell).

Stocks Poised to Beat on Earnings

Here are some stocks from the Zacks Consumer Discretionary sector that investors may consider, as our model shows that these, too, have the right combination of elements to post an earnings beat.

Stride, Inc. LRN has an Earnings ESP of +7.83% and a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stride is expected to register a 30.6% increase in earnings for the to-be-reported quarter. Stride reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 97.8%.

Choice Hotels International, Inc. CHH currently has an Earnings ESP of +0.94% and a Zacks Rank of 3.

Choice Hotels’ earnings for the to-be-reported quarter are expected to increase 7.8%. Choice Hotels reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 7.5%.

Caesars Entertainment, Inc. CZR currently has an Earnings ESP of +23.98% and a Zacks Rank of 3.

Caesars Entertainment’s earnings for the to-be-reported quarter are expected to increase 65.5%. Caesars Entertainment reported better-than-expected earnings in one of the trailing four quarters and missed on three occasions, the average surprise being negative 454.8%.

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This article originally published on Zacks Investment Research (zacks.com).

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