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 $212.0 million.
  • MGM traded 68,274 shares today in the pre-market hours as of 9:26 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 67.3. 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 9.6 million shares per day over the past 30 days. MGM Resorts International has a market cap of $9.9 billion and is part of the services sector and leisure industry. The stock has a beta of 1.56 and a short float of 6.4% with 2.22 days to cover. Shares are down 15.7% year-to-date as of the close of trading on Monday.

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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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.3%. 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 ($0.51 versus -$0.31).
  • 35.89% 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. Regardless of the strong results of the gross profit margin, the net profit margin of -0.81% is in-line with the industry average.
  • In its most recent trading session, MGM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • Net operating cash flow has decreased to $217.84 million or 40.43% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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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