As of June 6, 2025, MGM Growth Properties LLC's estimated intrinsic value ranges from $36.53 to $52.01 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $36.53 | -12.3% |
| Discounted Cash Flow (5Y) | $39.78 | -4.5% |
| Dividend Discount Model (Multi-Stage) | $36.53 | -12.3% |
| Dividend Discount Model (Stable) | $38.90 | -6.6% |
| Earnings Power Value | $52.01 | +24.9% |
Is MGM Growth Properties LLC (MGP) undervalued or overvalued?
With the current market price at $41.64, the stock appears to be fairly valued.
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 Growth Properties LLC'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 | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.27 | 1.32 |
| Cost of equity | 8.6% | 11.1% |
| Cost of debt | 5.0% | 8.0% |
| Tax rate | 2.8% | 2.9% |
| Debt/Equity ratio | 0.65 | 0.65 |
| After-tax WACC | 7.1% | 9.8% |
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 | $40 | $10,397M | 80.4% |
| 10-Year Growth | $37 | $9,888M | 63.1% |
| 5-Year EBITDA | $35 | $5,532M | 63.2% |
| 10-Year EBITDA | $40 | $6,255M | 41.7% |
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 | $1,015M |
| Discount Rate (WACC) | 9.8% - 7.1% |
| Enterprise Value | $10,348M - $14,279M |
| Net Debt | $4,161M |
| Equity Value | $6,186M - $10,118M |
| Outstanding Shares | 157M |
| Fair Value | $39 - $65 |
| Selected Fair Value | $52.01 |
| Metric | Value |
|---|---|
| Market Capitalization | $6527M |
| Enterprise Value | $6527M |
| Trailing P/E | 0.00 |
| Forward P/E | 17.53 |
| Trailing EV/EBITDA | 9.55 |
| Current Dividend Yield | 841.38% |
| Dividend Growth Rate (5Y) | 9.04% |
| Debt-to-Equity Ratio | 0.65 |
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% | $10.96 |
| Discounted Cash Flow (5Y) | 25% | $9.95 |
| Dividend Discount Model (Multi-Stage) | 20% | $7.31 |
| Dividend Discount Model (Stable) | 15% | $5.84 |
| Earnings Power Value | 10% | $5.20 |
| Weighted Average | 100% | $39.25 |
Based on our comprehensive valuation analysis, MGM Growth Properties LLC's weighted average intrinsic value is $39.25, which is approximately 5.7% below the current market price of $41.64.
Key investment considerations:
Given these factors, we believe MGM Growth Properties LLC is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.