MGM Resorts International (MGM) Stock Valuation — DCF Analysis
Gambling, Resorts & Casinos · NYSE
Current Price
$49.61
Intrinsic Value
$50.72
+2.2% margin of safety
COMPETITIVE MOAT
↑Iconic Las Vegas Strip Presence
MGM owns prime real estate on the Las Vegas Strip, a globally recognized entertainment hub. This physical dominance creates a significant barrier to entry for new competitors.
↑BetMGM Digital Expansion
BetMGM's aggressive digital strategy, including significant bonus bet promotions for major sporting events, is expanding MGM's reach beyond its physical casinos. This diversifies revenue streams and captures a younger demographic.
↑Brand Recognition and Loyalty
MGM Resorts has cultivated strong brand recognition and customer loyalty through its integrated resort model. This allows for cross-selling of services and repeat visitation.
INVESTMENT RISKS
↓Competitive Landscape Intensifies
MGM faces intense competition from both established casino operators like Wynn and Caesars, and emerging digital gambling platforms. This can pressure margins and market share.
↓Potential Acquisition Uncertainty
Barry Diller's bid for the remaining portion of MGM introduces uncertainty regarding future strategy and ownership structure. This could impact operational decisions and shareholder value.
↓Valuation Concerns
Despite recent stock declines, some analysts view MGM as overvalued. This suggests potential downside risk if growth expectations are not met or if market sentiment shifts.
Base case
MGM base case valuation
A base case discounted cash flow model for MGM estimates an intrinsic value of about $50.72 per share, against a current price of $49.61. The model assumes -2.1% annual free cash flow growth, a 10.0% discount rate, and a 7x exit multiple.
Intrinsic Value
$50.72
Margin of safety
+2.2%
Expected annual return
+0.4%
Base case assumptions: -2.1% annual growth, 10.0% discount rate, 7x exit multiple, 5 year projection. Data as of 2026-06-15.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the MGM valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for MGM Resorts International respond.
Open DCF Calculator for MGMCompany Overview
MGM Resorts International, through its various divisions, manages and possesses casino, lodging, and entertainment complexes across the United States and Macau. The company's operations are segmented into three main areas: Las Vegas Strip Resorts, Regional Operations, and MGM China. Its resort properties offer a comprehensive suite of amenities including gaming facilities, accommodation, convention spaces, dining options, entertainment venues, retail outlets, and more. Beyond traditional slots and table games, its casino activities also encompass online sports wagering and iGaming through its BetMGM platform. As of February 17, 2021, its extensive portfolio comprised 29 distinct hotel and gaming destinations. Notable assets include its properties on the Las Vegas Strip and the Fallen Oak golf course. The company caters to a diverse clientele, including high-stakes gamblers, vacationers, wholesale travel groups, business travelers, and organizational clients such as conventions, trade groups, and small conferences. Originally known as MGM MIRAGE, the firm rebranded to MGM Resorts International in June 2010. Established in 1986, MGM Resorts International is headquartered in Las Vegas, Nevada.
Financial Metrics — MGM Stock Valuation Data
Revenue/Share (TTM)
$69.11
FCF/Share (TTM)
$6.76
ROIC (TTM)
2.4%
ROE (TTM)
7.0%
P/FCF
7.3x
EV/EBITDA
24.9x
FCF Yield
13.64%
Debt/Equity
12.88x
Based on trailing twelve-month data, MGM shows a free cash flow per share of $6.76 and a ROIC of 2.4%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 7.3x and FCF yield of 13.64% are important context metrics when evaluating MGM's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of MGM?
MGM Resorts International currently generates $6.76 in free cash flow per share. At the current price of $49.61, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is MGM undervalued?
MGM trades at a P/FCF ratio of 7.3x with a free cash flow yield of 13.64%. This relatively low P/FCF may suggest the stock is attractively priced relative to its cash generation. However, whether MGM is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value MGM stock using DCF?
To perform a DCF valuation on MGM Resorts International: (1) Start with the trailing free cash flow per share ($6.76) as the base, (2) project future FCF growth over 5-10 years based on Gambling, Resorts & Casinos industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting MGM's risk profile — with a debt-to-equity of 12.88x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to MGM?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For MGM Resorts International, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Gambling, Resorts & Casinos trends, then discounting those amounts to today's dollars. MGM's ROIC of 2.4% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect MGM stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For MGM, with a debt-to-equity ratio of 12.88x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 24.9x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See MGM PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Cyclical valuationsDCF and P/E value MGM with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-15. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.