MGM Resorts International MGM is likely to benefit from strong Las Vegas performance, strategic capital investments and a solid digital business. Also, the emphasis on diversifying revenue streams with non-gaming attractions bodes well. However, elevated expenses remain a concern.

Let us discuss the factors that highlight why investors should retain the stock for now.

Factors Driving Growth of MGM Stock

MGM Resorts continues to showcase strong financial performance, driven by record-breaking domestic operations and strategic international expansion. The company achieved all-time highs in consolidated net revenues in 2024, with its Las Vegas segment reaching new records in slot handle and hotel revenues. Early 2025 trends indicate sustained momentum, with average daily rates projected to increase throughout the year.

Strategic investments remain a key pillar for MGM’s growth. The company has enhanced its Las Vegas properties, including major renovations at the Bellagio and the full integration of the Cosmopolitan into the MGM Rewards program. Its meetings and conventions segment continues to thrive, with record-breaking bookings and a $100 million investment in the Mandalay Bay Convention Center. These efforts position MGM as a dominant player in the premium hospitality market, reinforcing its competitive advantage.

MGM’s digital segment is also expanding rapidly, particularly through BetMGM, which generated over $2 billion in net revenues in 2024 and is expected to reach $2.4-$2.5 billion in 2025. With EBITDA now positive and strategic acquisitions strengthening its online gaming capabilities, MGM is solidifying its foothold in the growing digital betting space. Meanwhile, MGM China has exceeded expectations, securing over 16% market share in Macau and delivering its highest-ever full-year adjusted EBITDA. The company’s focus on diversifying revenue streams with non-gaming attractions further enhances its long-term growth prospects.

With robust financials, strategic investments and expanding global operations, MGM is well-positioned for continued success. Its strong presence in Macau, advancements in digital gaming and upcoming projects in Osaka and New York present compelling growth opportunities.

Concerns for MGM Stock

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Shares of MGM Resorts have declined 7.9% in the past three months compared with the industry’s 3.6% fall. The downside was due to an uncertain macroeconomic environment.

The company has been witnessing elevated operating expenses for some time. For the fourth quarter, MGM Resorts reported increased expenses concerning casino, room and food and beverage. During this time period, casino expenses were $1.26 billion compared with $1.24 billion reported in the prior-year period. The company is cautious of cost overruns, which are likely to impact the bottom line to some extent in 2025. It also remains cautious of wage inflation.

MGM’s Zacks Rank and Stocks to Consider

MGM Resorts currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Consumer Discretionary sector include:

RCI Hospitality Holdings, Inc. RICK currently sports a Zacks Rank #1 (Strong Buy). RICK delivered a trailing four-quarter earnings surprise of negative 62.9%, on average. The stock has declined 15.5% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for RICK’s 2025 sales and EPS indicates growth of 2.5% and 1,278.8%, respectively, from year-ago levels.

Mattel, Inc. MAT currently flaunts a Zacks Rank #1. MAT delivered a trailing four-quarter earnings surprise of 37.6%, on average. The stock has gained 1.5% in the past year.

The Zacks Consensus Estimate for MAT’s 2025 sales and EPS indicates growth of 1.4% and 4.9%, respectively, from year-ago levels.

Royal Caribbean Cruises Ltd. RCL currently carries a Zacks Rank #2 (Buy). RCL delivered a trailing four-quarter earnings surprise of 15.7%, on average. The stock has surged 57.8% in the past year.

The Zacks Consensus Estimate for RCL’s 2025 sales and EPS indicates growth of 9% and 26.4%, respectively, from year-ago levels.

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Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report

Mattel, Inc. (MAT) : Free Stock Analysis Report

MGM Resorts International (MGM) : Free Stock Analysis Report

RCI Hospitality Holdings, Inc. (RICK) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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