With solid activity in Vegas and a possible recovery in Macau, what’s next for MGM Stock?

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MGM Resorts (NYSE: MGM) stock has gained around 19% in the past month (21 trading days), significantly outperforming the S&P 500 which remains up around 9% over the same period. The recent rally is fueled by two factors. Although the company’s third-quarter 2022 earnings were below estimates, revenue was up 26% year-over-year, driven by a strong performance in Las Vegas, which remains the company’s main market. As gambling activity picked up in the Strip as Covid-19 troubles appear to lag far behind the United States, MGM also benefited from its acquisition of The Cosmopolitan of Las Vegas and Aria and Vdara. Additionally, China has recently eased some Covid-19 related restrictions, reducing quarantine times for tourists from other countries. This could help MGM’s operations in Macau, which have been significantly affected over the past two years, impacted by frequent lockdowns and travel restrictions.

However, now that MGM stock has gained around 19% over the past month, will it continue its short-term upward trajectory, or is a decline imminent? Based on historical performance, there are is a roughly equal chance of MGM stock going up or down over the next month. Out of 151 instances over the past ten years, MGM stock has risen 19% or more over twenty-one days, 80 of them caused the stock to rise during the next month period (twenty-one trading days). This historic pattern reflects 80 out of 151, or a 53% chance of a rise in MGM stock in the coming month, implying a neutral short-term outlook for the stock. See our analysis on MGM stock upside chance for more details.

Calculation of “probability of event” and “chance of upside” using data from the last ten years

  • After moving 8.2% or more over five days, the stock rose over the next five days at 47% of recoveries.
  • After moving 2% or more over ten days, the stock rose over the next ten days 51% of the times.
  • After moving 19% or more in a twenty-one day period, the stock rose over the next twenty-one days 53% of the times.

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Return November 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
Back to MGM 3% -18% 27%
S&P 500 return 3% -16% 78%
Trefis Multi-Strategy Portfolio 8% -16% 231%

[1] Cumulative monthly and cumulative annual as of 11/11/2022
[2] Cumulative total returns since the end of 2016

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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