MGM
MGM Resorts International
$38.40
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 222.3% above fair value
Bear
$0.00
-100.0%
3% stage 1 growth, 11% discount
Fair
$11.91
-69.0%
3% stage 1 growth, 11% discount
Bull
$0.00
-100.0%
4% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (3% base case)
Terminal Value % of EV
33%
Implied Market Multiple
38.3x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $39.71 from 36 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $11.91 per share.
Warnings
Wall Street's average price target is $39.71 (from 36 analysts). Our estimate is 100% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions