mgm-resorts-to-report-amid-shift-to-online-sports-gambling

MGM Resorts To Report Amid Shift To Online Sports Gambling

Business

MGM Resorts (MGM) will report fourth-quarter results after the close Wednesday as the casino giant looks to online sports bets while its Las Vegas properties suffer during the pandemic. MGM stock dipped.

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MGM Resorts Earnings Report

Estimates: Analysts expect a loss of 96 cents a share vs. EPS of 8 cents in the year-ago period, as revenue dives 54% to $1.47 billion, according to Zacks Investment Research.

Results: Check back after the close.

MGM Resorts, which owns half the casinos on the Vegas Strip, has been hit hard by the pandemic. Las Vegas casinos were closed for many months last year, shutting down conventions and keeping visitors away. Casinos have since reopened to limited capacity, and the vaccine rollout has buoyed hopes for a return to normal.

Meanwhile, MGM Resorts has turned its focus to online gambling. It solidified its partnership with Entain (GMVHY) with a second round of investment in sports betting app BetMGM in July. The app went live in Nevada in March 2020 and Michigan on Jan. 22.

The joint venture began in 2018, but MGM Resorts made an $11 billion takeover bid for Entain on Jan. 3. Entain rebuffed the all-cash offer, saying it was too low.

BetMGM also includes more than 100 gaming kiosks across MGM’s Las Vegas properties. It now operates in eight states. One of those states, Colorado, was among 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 wagers overall, and BetMGM was among the top online platforms taking bets. However, BetMGM and other apps suffered outages before and during the game, which highlighted both the surge in online betting and the lack of readiness among platforms.


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MGM Stock

Shares dipped 0.1% to 35.77 on the stock market today. MGM stock broke out past a buy point of 23.57 from a double-bottom base on Nov. 9, then hit the 20%-25% profit-taking zone on Nov. 27 and continued to rise. MGM stock popped above its 50-day line on Feb. 1, and shares have been sprinting higher ever since, hitting a 52-week high. 

Its relative strength line, which gauges performance vs. the S&P 500, has rebounded from pandemic lows and is trending upward, MarketSmith chart analysis shows. MGM stock has an RS Rating of 81 out of a best-possible 99.

Rival casino operators Penn National Gaming (PENN) fell 2%, Bally’s (BALY) was down 1% and Caesars Entertainment (CZR) was down 1%. Sports betting specialist DraftKings (DKNG) was flat.

Please follow Adelia Cellini Linecker on Twitter @IBD_Adelia.

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