The MGM Resorts story

What drives the business

• MGM has shifted away from owning domestic resort real estate toward operating properties under triple net leases, freeing capital for expansion and shareholder returns while retaining rent obligations and the need to reinvest in its resorts.
• Las Vegas properties including Bellagio, Aria and The Cosmopolitan typically derive over half their net revenue from nongaming activities, while regional properties depend primarily on gaming; in the quarter to June 2026, Strip revenue reached $2.2 billion and regional same-store revenue rose 3% to $904 million.
• Through its approximately 56% interest in MGM China, MGM operates MGM Macau and MGM Cotai under a Macau gaming concession, with the segment generating $1.1 billion of revenue in the quarter to June 2026.
• Its online expansion spans the consolidated MGM Digital portfolio, primarily LeoVegas, and a separate 50% interest in BetMGM, with MGM Digital revenue growing 20% to $196 million in the quarter to June 2026.
• MGM also owns 50% of MGM Osaka, an unconsolidated affiliate developing an integrated resort in Japan that management said remained on track for a 2030 opening.

What the price assumes

At $31.86, the reverse DCF implies free cash flow after stock pay growth of -15.9% a year for ten years, using a 10.2% discount rate.

That assumption contrasts with delivered growth of 25.5% a year over the last 10 years and the TenQ check's 14.7% bar, which slows the historical record halfway toward 4%.

The 18.6% free cash flow yield contrasts with an earnings yield of 4.8%, below the 5.2% Treasury benchmark, so the cash and earnings checks give different readings.

Value MGM on your own assumptions

What could change the story

• Revenue growth over the last twelve months slowed to 3.2% from the 10.1% annual pace over the last three years, while profits declined -21.1% over the last twelve months.
• MGM Digital's Segment Adjusted EBITDAR loss widened to $31 million from $26 million in the quarter to June 2026 despite revenue growth, showing that online expansion has not yet translated into segment profitability.
• Las Vegas Strip room pricing weakened in the quarter to June 2026, with average daily rate falling to $242 from $252 despite occupancy holding at 93%, making the quality of resort growth important.
• Total debt of $6.1 billion compares with $2.5 billion of cash and short-term investments, while interest coverage of 2.49 falls below the TenQ check's 5.00 bar; resort rent is an additional obligation excluded from Segment Adjusted EBITDAR.
• Financing remains part of the expansion story: MGM China issued $750 million of 6.25% senior notes due 2033 in May 2026, while Japan development remains exposed to changes in project timing and costs.

What to watch next

• Management's continued investment in Las Vegas luxury offerings makes room rates and revenue per available room important measures of whether spending strengthens resort economics.
• The next digital results will show whether MGM Digital can narrow its $31 million Segment Adjusted EBITDAR loss while BetMGM sustains its positive operating contribution.
• Updates on MGM Osaka's construction progress and spending will test management's stated 2030 opening schedule.
• Free cash flow, debt and repurchases will show how MGM balances expansion with capital returns after ending June 2026 with $1.4 billion remaining under its April 2025 repurchase plan.

Sources

• MGM Resorts's earnings release, filed with the SEC
• Its latest 10-Q or 10-K, for the risk factors
• The MGM stock report, for every figure and check