MGM Resorts stock (NYSE:MGM) has gained about 17% over the last month (21 trading days) considerably outperforming the S&P 500 which remains up by about 6% over the same period. The recent rally is being driven by a couple of factors including the company’s stronger than expected Q2 2022 results. Over the quarter, revenue rose by 44% year-over-year to $3.26 billion, driven by a strong performance of the company’s properties in Las Vegas, which saw sales more than double year-over-year. While growth was driven in part by the acquisition of The Cosmopolitan and Aria and Vdara properties, occupancy and gaming activity in the Las Vegas strip has increased considerably as Covid-19 eases in the U.S. Moreover, unlike rivals who have been betting big on Macau operations, MGM has taken a more measured approach to the market, which has faced headwinds recently due to stringent Covid restrictions and uncertainty surrounding the extension of casino licenses. MGM derived less than 30% of its pre-pandemic revenue from Macau and this should help the company fare better than peers such as Wynn Resorts and Las Vegas Sands who derived over 60% of sales from the region.
However, now that MGM stock has seen a gain of about 17% over the last month, will it continue its upward trajectory in the near term, or is a decline imminent? Going by historical performance, there is a roughly equal chance of a rise or a decline in MGM stock over the next month. Out of 185 instances in the last ten years that MGM stock saw a twenty-one-day rise of 6% or more, 96 of them resulted in the stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 96 out of 185, or a 52% chance of a rise in MGM stock over the coming month, implying a neuteral near-term outlook for the stock. See our analysis on MGM Stock Chance of A Rise for more details.
Calculation of ‘Event Probability’ and ‘Chance of Rise’ using last ten years data
- After moving 6% or more over five days, the stock rose in the next five days on 50% of the occasions.
- After moving 12% or more over ten days, the stock rose in the next ten days on 60% of the occasions.
- After moving 17% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 52% of the occasions.
With inflation rising and the Fed raising interest rates, MGM stock has fallen 23% this year. Can it drop more? See how low can MGM stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.
|S&P 500 Return||0%||-13%||85%|
|Trefis Multi-Strategy Portfolio||3%||-10%||253%|
 Month-to-date and year-to-date as of 8/7/2022
 Cumulative total returns since the end of 2016