Early Morning Activity Shows MGM Resorts International (MGM) Down

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified MGM Resorts International ( MGM) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified MGM Resorts International as such a stock due to the following factors:

  • MGM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $187.5 million.
  • MGM traded 33,522 shares today in the pre-market hours as of 8:35 AM.
  • MGM is down 3.2% today from Friday's close.

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More details on MGM:

MGM Resorts International, through its wholly owned subsidiaries, owns and/or operates casino resorts. The company operates in two segments, Wholly Owned Domestic Resorts and MGM China. MGM has a PE ratio of 86.6. Currently there are 10 analysts that rate MGM Resorts International a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for MGM Resorts International has been 7.0 million shares per day over the past 30 days. MGM Resorts International has a market cap of $11.9 billion and is part of the services sector and leisure industry. The stock has a beta of 1.87 and a short float of 6.6% with 3.12 days to cover. Shares are up 1.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates MGM Resorts International as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:
  • MGM's revenue growth has slightly outpaced the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 4.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MGM RESORTS INTERNATIONAL reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MGM RESORTS INTERNATIONAL continued to lose money by earning -$0.33 versus -$3.61 in the prior year. This year, the market expects an improvement in earnings ($0.61 versus -$0.33).
  • 37.27% is the gross profit margin for MGM RESORTS INTERNATIONAL which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MGM's net profit margin of 4.08% significantly trails the industry average.
  • Net operating cash flow has declined marginally to $512.83 million or 4.21% when compared to the same quarter last year. Despite a decrease in cash flow of 4.21%, MGM RESORTS INTERNATIONAL is in line with the industry average cash flow growth rate of -5.19%.
  • Although MGM's debt-to-equity ratio of 2.90 is very high, it is currently less than that of the industry average. Along with the unfavorable debt-to-equity ratio, MGM maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems.

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