MGM Resorts International (MGM) Could Be 10% Below Fair Value On Q2 Earnings
MGM Resorts International (MGM) just reported second quarter 2026 results, with higher net income and earnings per share from continuing operations compared with a year earlier, alongside a significant goodwill impairment charge.
See our latest analysis for MGM Resorts International.
MGM Resorts International shares trade at US$44.57 after easing 6.21% over the past month. However, the 90 day share price return of 15.77% and 1 year total shareholder return of 24.67% still point to improving momentum despite a slightly weaker 3 year total shareholder return.
If MGM’s latest earnings and buybacks have you reassessing the sector, it can help to see what else is out there, starting with 18 top founder-led companies
MGM Resorts International appears to be a solid operator after its recent earnings and buybacks, yet the share price has pulled back from recent highs. This raises the question of whether the current level offers a fair opportunity today or whether the stock has already moved up enough.
Most Popular Narrative: 9.5% Undervalued
MGM Resorts International last closed at $44.57, while the most followed narrative sets fair value around $49.24 using a 12.46% discount rate. That gap reflects a view that cash flows and earnings could justify a higher price if the assumptions play out.
The development and opening of international integrated resorts specifically, the exclusive license in MGM Osaka, anticipated multibillion-dollar revenue potential, and Dubai project should capture rising demand for destination travel among the growing global middle class, unlocking new recurring revenue streams and diversifying consolidated earnings over the long term.
Curious what sits behind that Osaka and Dubai optimism? The narrative leans on measured revenue growth, fatter margins, and a richer earnings multiple. The exact mix of those moving parts is where the story gets interesting.
Result: Fair Value of $49.24 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, MGM Resorts International still faces meaningful risks if large capital expenditure projects overrun or if premium gaming and travel demand softens more than analysts currently factor in.
Find out about the key risks to this MGM Resorts International narrative.
Another View: MGM Resorts International Through Earnings Multiples
The SWS DCF model points to fair value around $52.44, which lines up with the idea that MGM Resorts International trades at a discount to its future cash flows. The P/E ratio of 26.5x is above the industry at 25.5x and the fair ratio of 18.5x, so the question is how much of that gap investors are comfortable paying for.
See what the numbers say about this price in our valuation breakdown with See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
If this mix of optimism and caution around MGM Resorts International leaves you on the fence, now is a good time to review the key data points yourself and test your thesis against the 1 key reward and 2 important warning signs
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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