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MGM Resorts (MGM) topped fourth-quarter estimates after the close on Wednesday, and the casino giant predicted its online betting app will more than double its revenue this year. MGM’s stock has plummeted.
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MGM Resorts Revenue Report
Estimates: Analysts expect a loss of 96 cents per share versus 8 cents EPS of 8 cents a year earlier, as revenues plunge 54% to $ 1.47 billion, according to Zacks Investment Research.
Results: Loss of 90 cents per share on sales of $ 1.49 billion. Vegas Strip revenues fell 66% to $ 480 million as a lack of conventions forced midweek closings. Regional revenues fell 34% to $ 595 million. China’s revenue fell 58% to $ 305 million.
MGM Resorts, which owns half of the casinos on the Vegas Strip, has been hit hard by the pandemic. Las Vegas casinos were closed for several months last year, ending conventions and driving visitors away. Casinos have since reopened to limited capacity and the rollout of the vaccine has fueled hopes for a return to normal.
Meanwhile, MGM Resorts has focused on online gambling. He solidified his partnership with Entain (GMVHY) with a second round of investment in the BetMGM sports betting app in July. The app went live in Nevada in March 2020 and Michigan on January 22.
Net income in 2020 associated with BetMGM totaled $ 178 million, above the company’s forecast of $ 150-160 million, while operating losses were $ 62 million, which was shared with his partner JV.
BeMGM expects 2021 revenue to “grow well above 100%” from 2020, and last month alone saw $ 44 million. The app has a 17% market share, with 25% in New Jersey and about a third in Tennessee and Colorado. The company expects it to be 20 markets by the end of the year.
The joint venture began in 2018, but MGM Resorts launched an $ 11 billion takeover bid for Entain on January 3. Entain rejected the all-cash offer, saying it was too low. On January 28, BetMGM signed a sports betting deal with sports media company The Athletic.
BetMGM also includes over 100 gambling kiosks at MGM properties in Las Vegas. It now operates in eight states. One of those states, Colorado, was one of a handful of states that in the last election cycle passed laws allowing gambling. BetMGM also operates in New Jersey, Pennsylvania, Indiana, Tennessee, West Virginia and Iowa.
Super Bowl LV took in nearly $ 500 million in total bets, and BetMGM was among the best online platforms to take bets. However, BetMGM and other apps suffered outages before and during the game, which highlighted both the skyrocketing online betting and the platforms’ lack of preparedness.
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MGM stock
Shares fell 1.6% late after closing 1.8% higher at 36.47 on the stock market today. MGM stock broke a 23.57 buy point from a double base on November 9, then hit the 20% to 25% profit-taking zone on November 27 and continued to rise. MGM stock broke its 50 day line on February 1 and shares have risen since, hitting a 52 week high.
Its relative strength line, which rates performance against the S&P 500, has rebounded from the pandemic lows and is trending upward, according to MarketSmith’s chart analysis. The MGM stock has an RS rating of 81 out of 99 of the best possible.
Competitor casino operators Penn National Gaming (PENN) fell 2.8%, Bally’s (BALY) increased by 1% and Caesars Entertainment (CZR) lost 2.4%. Sports betting specialist DraftKings (DKNG) added 0.9%.
Please follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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