The shares of MGM Resorts (NYSE: MGM) have been observing investor optimization despite sharp declines reported by peers, Wynn Resorts
How did MGM Resorts perform during the pandemic?
In 2021, MGM Resorts reported an 87% (yoy) growth in total revenues largely assisted by its Las Vegas and Regional properties. Before the pandemic, the company’s Las Vegas, Regional, and China operations contributed 47%, 29%, and 24% of total revenues, respectively – with a similar share of total profits. Interestingly, the company’s Vegas and Regional operations assisted the bottom line as the profits (adjusted EBITDA) from MGM China declined by 97% from pre-pandemic levels to just $25 million. In 2021, the cash from operations came in at $1.3 billion despite total revenues being 25% below pre-pandemic levels. This can be largely attributed to gaming taxes (included in casino expenses) which increase/decrease in proportion to operating revenues. However, the company’s adjusted property EBITDA increased from 26% in 2019 to 30% in 2021, even though the MGM China operations were down by 70% over the same period.
Stock Has Moved In Sync With Markets
MGM stock declined from levels of around $31 in February 2020 (pre-crisis peak) to levels of around $9 in March 2020 (as the markets bottomed out), implying MGM stock lost 70% from its approximate pre-crisis peak. It observed a strong rally post broader market sell-off and has reached $42 at present – nearly 30% above pre-pandemic levels. In comparison, the S&P 500 Index first fell 34% as lockdowns were imposed in many countries and currently is almost 30% above February 2020 levels.
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Credit: www.forbes.com /