MGM Resorts International (MGM) Intrinsic Value & DCF Valuation
Gambling, Resorts & Casinos · NYSE
Current Price
$39.89
Intrinsic Value
$52.99
+24.7% margin of safety
What Is MGM Resorts International's Intrinsic Value?
As of 2026-09-11, the base-case DCF model estimates the intrinsic value of MGM Resorts International (MGM) at $52.99 per share, compared with a market price of $39.89, a margin of safety of +24.7%. The base case assumes 1.5% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $36.94 to $71.95. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is MGM Resorts International (MGM) Undervalued?
At $39.89, MGM trades about 24.7% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Iconic Brand & Prime Real Estate
MGM possesses globally recognized brands and prime real estate in desirable locations like Las Vegas. This attracts high-value customers and limits new entrants.
↑Loyalty Programs & Customer Data
Extensive loyalty programs foster repeat business and generate valuable customer data. This allows for personalized offers and targeted marketing, increasing customer retention.
↑Integrated Resort Ecosystem
MGM's integrated resorts offer a comprehensive entertainment experience, including gaming, dining, and shows. This creates a sticky ecosystem that encourages guests to spend more time and money on-site.
INVESTMENT RISKS
↓Regulatory Scrutiny & Compliance Costs
The gambling industry is heavily regulated, leading to significant compliance costs and potential fines. Changes in regulations can impact operational flexibility and profitability.
↓Economic Sensitivity & Discretionary Spending
MGM's revenue is highly dependent on discretionary consumer spending, making it vulnerable to economic downturns. Recessions can lead to reduced travel and entertainment budgets.
↓Cybersecurity Threats & Data Breaches
As a large operator of customer data, MGM is a prime target for cyberattacks. Data breaches can result in significant financial losses and reputational damage.
Base case
MGM base case valuation
Intrinsic Value
$52.99
Margin of safety
+24.7%
Expected annual return
+5.8%
Base case assumptions: 1.5% annual growth, 10.0% discount rate, 6x exit multiple, 5 year projection. Data as of 2026-09-11.
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)
$69.92
FCF/Share (TTM)
$6.58
ROIC (TTM)
2.7%
ROE (TTM)
17.0%
P/FCF
6.0x
EV/EBITDA
18.8x
FCF Yield
16.66%
Debt/Equity
11.87x
On a trailing twelve-month basis, MGM generates free cash flow per share of $6.58 alongside a ROIC of 2.7%, both central inputs for a DCF valuation. Its P/FCF ratio of 6.0x and FCF yield of 16.66% then frame how MGM is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of MGM?
MGM Resorts International currently generates $6.58 in free cash flow per share. At the current price of $39.89, 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 6.0x with a free cash flow yield of 16.66%. A low P/FCF means investors are paying less per dollar of free cash flow; whether that is cheap depends on the company's growth, cyclicality, and capital intensity. 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 ($6.58) 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 11.87x, 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 2.7% means the company's return on invested capital sits below the level that typically clears 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 11.87x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 18.8x, 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 2026-09-11. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.