MGM Options Contract Analysis and Investment Opportunities
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Should l Buy MGM?
Source: NASDAQ.COM
- Put Option Appeal: The current bid for the $35.00 put option is 4 cents, and if an investor sells this contract, they commit to buying the stock at $35.00, effectively lowering their cost basis to $34.96, which represents about a 2% discount to the current price of $35.70, making it an attractive alternative for potential buyers.
- Put Option Yield Potential: Should the contract expire worthless, the premium would yield a 0.11% return on the cash commitment, or 0.83% annualized, referred to as YieldBoost, indicating potential profitability under current market conditions.
- Call Option Return Analysis: The $37.00 call option has a current bid of 9 cents, and if an investor buys shares at $35.70 and sells this contract, they could achieve a total return of 3.89% if the stock is called away at expiration, showcasing potential gains in a rising market.
- Call Option Risk Assessment: The probability of the call contract expiring worthless is 52%, allowing investors to retain both their shares and the premium collected, with an additional return of 0.25% or 1.84% annualized, further enhancing the investor's profit potential.
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Analyst Views on MGM
Wall Street analysts forecast MGM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MGM is 40.31 USD with a low forecast of 29.00 USD and a high forecast of 56.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
5 Buy
7 Hold
2 Sell
Hold
Current: 36.280
Low
29.00
Averages
40.31
High
56.00
Current: 36.280
Low
29.00
Averages
40.31
High
56.00
About MGM
MGM Resorts International is a global gaming and entertainment company with national and international locations featuring hotels and casinos, meetings and conference spaces, live and theatrical entertainment experiences, and a range of restaurant, nightlife and retail offerings. The Company’s segments include Las Vegas Strip Resorts, Regional Operations, MGM China, and MGM Digital. The Las Vegas Strip Resorts segment consists of Aria, Bellagio, The Cosmopolitan of Las Vegas, MGM Grand Las Vegas, Mandalay Bay, Luxor, New York-New York, Excalibur, and Park MGM. The Regional Operations segment consists of MGM Grand Detroit in Detroit, Michigan; Beau Rivage in Biloxi, Mississippi; Gold Strike Tunica in Tunica; Borgata in Atlantic City, New Jersey; MGM National Harbor in Prince George’s County, Maryland; MGM Springfield in Springfield, Massachusetts; Empire City in Yonkers, New York, and others. MGM Digital is its online gaming portfolio which is primarily comprised of LeoVegas.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- DuPont Earnings Expectations: DuPont is expected to report earnings of $0.43 per share and revenue of $1.69 billion for Q4 2025, with analysts noting ongoing pressure in short-cycle businesses, while slight improvements in the automotive sector may influence investor sentiment.
- Cisco's AI Focus: Cisco anticipates earnings of $1.02 per share and revenue of $15.1 billion for Q2 FY2026, with CEO highlighting a major multi-year campus networking refresh, making AI infrastructure demand a critical growth driver.
- Importance of Employment Report: The January employment report is expected to show an addition of 80,000 nonfarm payrolls and an unchanged unemployment rate of 4.4%, directly impacting private consumption and U.S. GDP, making it crucial for investors to monitor.
- Consumer Price Index Insights: The January CPI is projected to increase by 2.5% year-over-year, with core CPI rising by 2.6%, providing essential inflation details despite not being the Fed's preferred measure, particularly regarding persistent shelter cost inflation.
See More
U.S. Jobs and Inflation Data Set for Release
- Job Data Expectations: The U.S. is expected to add 60,000 jobs in January, up from 50,000 in December, which could influence the Fed's monetary policy direction amidst ongoing economic uncertainty.
- Inflation Metrics Analysis: The January Consumer Price Index is projected to rise by 0.29% month-over-month and 2.5% year-over-year, showing improvement but still falling short of the Fed's 2% target, potentially affecting investor rate expectations.
- Market Reaction and Risks: Recent signs of labor market weakness, including an ADP report indicating only 22,000 new private sector jobs, may heighten expectations for further Fed rate cuts, although investors remain optimistic about economic resilience.
- Stock Market Rotation Trend: A significant rotation within the stock market is underway, with the Dow Jones Industrial Average rising over 2% this week, reflecting confidence in economic recovery, despite ongoing weakness in tech stocks.
See More
MGM Resorts International Q4 2025 Earnings Call Highlights
- Executive Changes: The appointment of Ayesha Molino as COO and Kenny Feng as CEO of MGM China signifies a strategic leadership shift at MGM Resorts, reinforcing its position as a global integrated resort operator and setting the stage for future growth initiatives.
- Financial Performance: In Q4 2025, MGM China reported a 21% increase in net revenues and a 31% rise in adjusted EBITDAR, achieving a new quarterly record that underscores the company's strong performance in the Macau market and ongoing profitability.
- Market Outlook: Management expressed optimism for 2026, anticipating growth in Las Vegas driven by major events like the Super Bowl, with significant increases expected in group and convention revenues, reflecting a robust events calendar.
- Shareholder Returns: The company repurchased 15 million shares for $516 million in Q4, totaling 37.5 million shares for $1.2 billion in 2025, demonstrating strong cash flow and a commitment to returning value to shareholders.
See More
MGM Resorts Q4 Earnings Exceed Expectations
- Earnings Beat: MGM Resorts reported a Q4 Non-GAAP EPS of $1.60, surpassing expectations by $1.05, which reflects a significant improvement in profitability and boosts investor confidence.
- Revenue Growth: The company achieved $4.6 billion in revenue for Q4, a 7% year-over-year increase that exceeded market expectations by $170.39 million, indicating strong performance in a competitive market and solidifying its market position.
- Regional Operations Performance: MGM China reported net revenues of $1.2 billion, up 21% year-over-year, while regional operations saw net revenues of $950 million, a 2% increase, showcasing robust growth across different markets and enhancing future expansion potential.
- Digital Business Progress: MGM Digital generated net revenues of $188 million, a 35% increase year-over-year, with adjusted EBITDAR losses narrowing to $7 million, indicating positive strides in digital transformation and potential for future profitability.
See More
MGM China Reports Record Highs in 2025 Performance
- Record Visitor Numbers: Macau welcomed approximately 40 million visitors in 2025, a 14.7% increase year-on-year, with daily visitation reaching 109,779, significantly enhancing MGM China's market appeal and growth potential.
- Revenue and EBITDA Growth: MGM China reported net revenue of HK$34.8 billion in 2025, an 11% year-on-year increase, while adjusted EBITDA reached HK$10 billion, maintaining a margin of 28.8%, reflecting strong operational efficiency and market demand.
- Market Share Increase: MGM China's market share rose to 16.1%, up from 15.8% in 2024, with MGM COTAI and MGM MACAU holding 10.1% and 6.0% market shares respectively, further solidifying its leadership position in Macau.
- Cultural Tourism Achievements: The residency show
See More
MGM Resorts Reports Significant Q4 Earnings Growth
- Earnings Performance Boost: MGM Resorts reported a net income of $293.612 million for Q4, translating to earnings per share (EPS) of $1.11, a significant increase from last year's $157.432 million and $0.52 per share, indicating a robust recovery in profitability.
- Strong Adjusted Earnings: Excluding items, MGM's adjusted EPS reached $1.60, demonstrating positive progress in cost control and operational efficiency, which further enhances investor confidence in the company's financial health.
- Stable Revenue Growth: The company's revenue for the fourth quarter rose 6.0% year-over-year to $4.605 billion, up from $4.346 billion last year, reflecting a continued rebound in travel and entertainment demand.
- Optimistic Market Outlook: With economic recovery and increased consumer spending, MGM's earnings and revenue growth provide a solid foundation for future market expansion and investment, suggesting the company will maintain strong performance in a competitive landscape.
See More
