MGM Resorts faces significant financial risks from substantial debt ($7 billion), including variable-rate debt, and substantial rent payments. Shortfall guarantees on landlord debt, and guarantees for Osaka IR KK, pose contingent liabilities. Economic downturns, industry competition, and regulatory challenges could negatively impact operations and profitability. Cybersecurity incidents and related litigation also present significant uncertainty. The company's reliance on leased properties and Macau gaming concession also introduces risks.
Financial Upside
MGM Resorts experienced revenue growth in Q3 2024, particularly in MGM China, due to Macau operations recovery. Increased revenues from rooms, food and beverage, and entertainment, retail, and other sources contributed to this growth. The company's stock repurchase program, while a use of cash, could potentially increase shareholder value if the stock price rises. Issuance of new debt and repayment of existing debt, along with capital expenditures, are also factors in the company's financial position.
