Factors Setting the Tone for MGM Resorts' (MGM) Q1 Earnings

Zacks Equity Research

29 April 2024 at 10:58 am·4-min read

MGM Resorts International MGM is scheduled to report first-quarter 2024 results on May 1, 2024, after the closing bell.

In the last reported quarter, the company’s earnings and revenues topped the Zacks Consensus Estimate by 58.2% and 6.9%, respectively.

What Do the Estimates Say?

The Zacks Consensus Estimate for first-quarter earnings per share is pegged at 60 cents, indicating an increase of 36.4% from 44 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at nearly $4.18 billion. The metric suggests an increase of 8% from the year-ago quarter’s figure.

MGM Resorts International Price and EPS Surprise

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

Let’s take a look at how things have shaped up in the quarter.

Factors to Note

MGM Resorts’ first-quarter top line is likely to have gained from pent-up consumer demand, high domestic casino spending and robust demand for sports betting. This and increased visitation in the Macau market are likely to have aided the company’s performance in the to-be-reported quarter.

The company’s domestic performance is likely to have gained profit from major events, including the inaugural Formula 1 race and its first Super Bowl accompanied by the launch of its Marriott relationship. Also, enhancements in omnichannel marketing offerings and opportunities to increase its convention room nights and international mix, are likely to have aided the company’s performance in the to-be-reported quarter.

The Zacks Consensus Estimate for first-quarter 2024 revenues at MGM China is pegged at $922 million compared with $618 million reported in the year-ago quarter.

Solid contributions from rooms, food and beverage and casino are likely to have driven the company’s first-quarter top line. The Zacks Consensus Estimate for revenues at rooms and food and beverage is pegged at $908 million and $746 million, suggesting a year-over-year increase from $848 million and $722 million, respectively. The consensus mark for first-quarter casino revenues is pegged at $1.99 billion, indicating a rise from $1.88 billion reported in the year-ago period.

Incremental expenses related to labor, incentive fees and other related expenses are concerns for the bottom line of the company. Nonetheless, its initiatives to improve productivity and reduce the cost of sales through leveraging procurement activities are likely to have more than offset these headwinds in the to-be-reported quarter.

What the Zacks Model Unveils

Our proven model predicts a likely earnings beat for MGM Resorts this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: MGM Resorts has an Earnings ESP of +24.65%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank of 3.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Consumer Discretionary sector, which, according to our model, have the right combination of elements to post an earnings beat:

Interface, Inc. TILE currently has an Earnings ESP of +16.67% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

TILE’s earnings for the to-be-reported quarter are expected to increase 71.4%. It reported better-than-expected earnings in three of the trailing four quarters and missed on the remaining one occasion, the average surprise being 29.9%.

DraftKings Inc. DKNG currently has an Earnings ESP of +12.65% and a Zacks Rank of 3.

DKNG’s earnings for the to-be-reported quarter are expected to increase 67.8%. It reported better-than-expected earnings in two of the trailing four quarters and missed on the other two occasions, the average surprise being negative 57.1%.

AMC Entertainment Holdings, Inc. AMC currently has an Earnings ESP of +6.96% and a Zacks Rank of 3.

AMC’s earnings for the to-be-reported quarter are expected to increase 39.2%. It reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 50.4%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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MGM Resorts International (MGM) : Free Stock Analysis Report

AMC Entertainment Holdings, Inc. (AMC) : Free Stock Analysis Report

Interface, Inc. (TILE) : Free Stock Analysis Report

DraftKings Inc. (DKNG) : Free Stock Analysis Report

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What Do the Estimates Say?

MGM Resorts International Price and EPS Surprise

Factors to Note

What the Zacks Model Unveils

Stocks Poised to Beat Earnings Estimates

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