As of June 21, 2025, MGM Resorts International's estimated intrinsic value ranges from $23.01 to $117.98 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $75.63 | +124.0% |
| Discounted Cash Flow (5Y) | $61.98 | +83.5% |
| Dividend Discount Model (Multi-Stage) | $30.34 | -10.2% |
| Dividend Discount Model (Stable) | $23.01 | -31.9% |
| Earnings Power Value | $117.98 | +249.4% |
Is MGM Resorts International (MGM) undervalued or overvalued?
With the current market price at $33.77, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate MGM Resorts International's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.96 | 1.18 |
| Cost of equity | 8.3% | 11.5% |
| Cost of debt | 5.3% | 5.4% |
| Tax rate | 11.9% | 14.5% |
| Debt/Equity ratio | 0.77 | 0.77 |
| After-tax WACC | 6.7% | 8.5% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $62 | $21,311M | 72.1% |
| 10-Year Growth | $76 | $25,027M | 54.4% |
| 5-Year EBITDA | $72 | $24,156M | 75.3% |
| 10-Year EBITDA | $86 | $27,977M | 59.2% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $2,736M |
| Discount Rate (WACC) | 8.5% - 6.7% |
| Enterprise Value | $32,367M - $40,737M |
| Net Debt | $4,444M |
| Equity Value | $27,923M - $36,293M |
| Outstanding Shares | 272M |
| Fair Value | $103 - $133 |
| Selected Fair Value | $117.98 |
| Metric | Value |
|---|---|
| Market Capitalization | $9191M |
| Enterprise Value | $13635M |
| Trailing P/E | 13.56 |
| Forward P/E | 9.66 |
| Trailing EV/EBITDA | 9.00 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | -100.00% |
| Debt-to-Equity Ratio | 0.77 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $22.69 |
| Discounted Cash Flow (5Y) | 25% | $15.49 |
| Dividend Discount Model (Multi-Stage) | 20% | $6.07 |
| Dividend Discount Model (Stable) | 15% | $3.45 |
| Earnings Power Value | 10% | $11.80 |
| Weighted Average | 100% | $59.50 |
Based on our comprehensive valuation analysis, MGM Resorts International's weighted average intrinsic value is $59.50, which is approximately 76.2% above the current market price of $33.77.
Key investment considerations:
Given these factors, we believe MGM Resorts International is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.