MGM Resorts (MGM) reached the top estimates after Wednesday, and the casino giant predicted that the online betting app would earn more than double this year. MGM share the case.
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MGM Resorts Earnings Report
EstimatesAnalysts expect a 96-cent loss per share from the EPS of 8 cents in the previous year, as revenue dipped 54% to $ 1.47 billion, according to Zacks Investment Research.
Results: 90 cents loss per share on revenue of $ 1.49 billion. Vegas Strip revenue fell 66% to $ 480 million as the lack of events closed mid-week. Regional revenue 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, was hit hard by the pandemic. Las Vegas casinos were closed for many months last year and conventions were closed and visitors kept away. Casinos have since reopened to limited capacity, and the rollout of vaccines has raised hopes of a normal return.
Meanwhile, MGM Resorts has turned their attention to online gambling. It has its partnership with Omhul (GMVHY) with a second round of investment in the sports betting app BetMGM in July. The app will be launched in March 2020 in Nevada and Michigan on January 22nd.
Net income in 2020, associated with BetMGM, is $ 178 million, above the forecast of $ 150 million to $ 160 million, while operating losses are $ 62 million, which is shared with its JV partner.
BeMGM expects 2021 revenue to “grow more than 100%” compared to 2020, and last month alone there was $ 44 million. The app has 17% market share, with 25% in New Jersey and about a third share in Tennessee and Colorado. The company expects that in 20 markets by the end of the year.
The joint venture began in 2018, but MGM Resorts made a $ 11 billion takeover bid for Entain on January 3rd. Entain turned down the cash offer, saying it was too low. On January 28, BetMGM entered into a sports betting deal with sports media company The Athletic.
BetMGM also features more than 100 gaming kiosks in MGM’s Las Vegas properties. It now operates in eight states. One of the states, Colorado, was among a handful of states that passed laws allowing gambling in the last election cycle. BetMGM also operates in New Jersey, Pennsylvania, Indiana, Tennessee, West Virginia and Iowa.
Super Bowl LV paid a total of $ 500 million and BetMGM was one of the best online betting platforms. However, BetMGM and other programs interrupted before and during the game, highlighting the increase in online betting and the lack of readiness among platforms.
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MGM Stock
Shares fell 1.6% after closing 1.8% at 36.47 on the stock market today. The MGM share broke on November 9 from a buyout point of 23.57 from a double bottom base, then reached the profitable zone of 20% -25% on November 27 and continued to rise. The MGM share rose above its 50-day line on February 1, and the stock has since risen higher, reaching a 52-week high.
Its relative strength line, which measures performance against the S&P 500, has declined due to the lowest pandemic and is upward, according to the MarketSmith chart analysis. MGM shares have an RS rating of 81 out of a best possible 99.
Competitive casino operators Penn National Gaming (PENN) decreased by 2.8%, Bally’s (BALY) increased by 1% and Caesars Entertainment (CZR) lost 2.4%. Sports betting specialist DraftKings (DKNG) added 0.9%.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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