Today's Pre-Market Laggard Is MGM Resorts International (MGM)

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 $217.9 million.
  • MGM traded 55,596 shares today in the pre-market hours as of 8:27 AM.
  • MGM is down 2.1% today from yesterday'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 77.5. Currently there are 11 analysts that rate MGM Resorts International a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for MGM Resorts International has been 9.4 million shares per day over the past 30 days. MGM Resorts International has a market cap of $11.4 billion and is part of the services sector and leisure industry. The stock has a beta of 1.67 and a short float of 7% with 2.81 days to cover. Shares are down 2.1% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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 expanding profit margins. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 0.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MGM RESORTS INTERNATIONAL has improved earnings per share by 20.0% 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 -$0.31 versus -$3.61 in the prior year. This year, the market expects an improvement in earnings ($0.56 versus -$0.31).
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, MGM RESORTS INTERNATIONAL's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 2.92 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, MGM has a quick ratio of 0.52, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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