Some casino stocks win when everything is booming at once. This one has a more complicated setup. The top line is still growing, China is healthier, digital gaming is improving, and shareholders just backed the current leadership. The problem is that Las Vegas is not firing on all cylinders yet. That makes this a stock worth watching closely, but not one to chase blindly.
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What Just Happened
The quarter was mixed
MGM Resorts International (NYSE: MGM) reported first-quarter 2026 revenue of $4.5 billion, up 4% year over year and ahead of Wall Street expectations. That part was fine. The issue was profitability.
Net income fell to $125 million from $149 million a year earlier, adjusted EBITDA dropped to $580 million from $637 million, and adjusted EPS came in at $0.49 versus $0.69 last year.
Las Vegas was the weak spot
Las Vegas Strip revenue increased slightly to $2.2 billion, but Segment Adjusted EBITDAR fell 8% to $749 million. That is the heart of the concern. MGM is still getting revenue out of its Strip assets, but costs and weaker visitor trends are pressuring margins.
Reuters noted that the profit miss was tied to slower Las Vegas performance and macro uncertainty around tourist visits.
Shareholders backed management
At MGM’s May 6 annual meeting, shareholders re-elected all board nominees, ratified Deloitte as auditor, and approved executive compensation. That does not fix the margin problem, but it does signal investors are not looking for a governance shake-up right now. The market is giving management room to execute.
Why The Business Still Matters
MGM is more than one casino market
MGM has a broad portfolio across Las Vegas, regional casinos, Macau, and digital gaming. The company owns and operates major Strip assets like Bellagio, MGM Grand, and Mandalay Bay, while also operating regional properties and building exposure to online gaming through BetMGM and MGM Digital.
That gives the company several ways to grow, even when one part of the business is uneven.
China is helping
MGM China revenue increased 9% year over year to $1.1 billion in Q1. Market share also strengthened, with management commentary pointing to 15.4% overall share and 17.3% in March.
Segment Adjusted EBITDAR still slipped because of higher branding fees, but the revenue momentum in Macau is a clear positive.
Digital is no longer just a cash sink
MGM Digital revenue rose 43% to $183 million, while the segment’s adjusted EBITDAR loss improved to $26 million from a $34 million loss last year. BetMGM also remains a key longer-term lever.
The North American venture generated $696 million of Q1 net revenue, up 6%, with adjusted EBITDA up 11% to $25 million. BetMGM still needs to prove it can scale profitably, but the direction is better than it was.
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Why The Stock Has A Case
Revenue growth is still alive
The headline growth rate is not explosive, but it is positive. Consolidated revenue grew 4%, MGM China grew 9%, MGM Digital grew 43%, and regional operations grew 2%. That is not a broken business. The stock’s issue is margin conversion, not demand falling off a cliff.
The digital optionality is real
The BetMGM story gives MGM something traditional casino operators did not have a decade ago: exposure to online sports betting and iGaming. BetMGM’s 2026 outlook calls for net revenue from operations of $2.9 billion to $3.1 billion and adjusted EBITDA of $300 million to $350 million, toward the lower end. That is meaningful if the joint venture keeps improving profitability.
The stock is not priced like perfection
MGM is trading around $39, below its 52-week high near $41 and still close to where analysts are split. The most recent analyst rating you shared was Hold with a $40 target, while the broader setup suggests investors are waiting for proof that Las Vegas margins can stabilize.
That makes sense. The stock does not need a heroic rerating to work, but it does need better earnings quality.
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What Has To Go Right
Las Vegas margins need to stabilize
This is the big one. MGM needs Strip revenue to translate into better EBITDAR. If Las Vegas keeps producing flat revenue and lower margins, the stock will struggle to break out. The company needs stronger convention demand, better room trends, and tighter cost control to rebuild confidence.
China needs to keep gaining share
MGM China’s revenue growth is one of the cleanest positives in the story. If the company keeps gaining share in Macau while managing the branding-fee drag, the international segment can offset some U.S. softness.
BetMGM needs to prove profitability is durable
Digital gaming is exciting only if the economics keep improving. BetMGM’s revenue growth and positive EBITDA help, but investors need to see the business move toward consistent cash generation instead of another spend-heavy land grab.
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What Could Trip It Up
Leverage remains a concern
The stock’s neutral rating from TipRanks’ AI analyst was driven partly by high leverage and margin compression. That is fair. Casinos are capital-intensive businesses, and leverage can make earnings volatility feel worse when margins slip. Investors should not ignore the balance sheet just because revenue is growing.
Las Vegas tourism can stay soft
If macro uncertainty keeps visitors cautious or convention demand fails to offset softer leisure trends, Las Vegas stays the pressure point. MGM’s Strip properties are still major assets, but even great assets need traffic, pricing power, and expense discipline.
Digital competition is brutal
Online betting and iGaming are attractive, but they are also crowded. DraftKings, FanDuel, Caesars, BetMGM, and others are all fighting for users. Better EBITDA is encouraging, but the digital business still has to keep proving it can grow without spending too aggressively.
What I’d Watch Next
The first thing to watch is Las Vegas Strip EBITDAR margin. That is the fastest way to tell whether the core U.S. resort business is improving. The second is MGM China market share, especially whether March strength carries forward.
The third is BetMGM profitability, because digital only becomes a real valuation driver if EBITDA keeps moving higher. The fourth is debt and cash flow discipline, since leverage is part of the bear case.
My Take
Hold for now. Buy only on a cleaner margin turn. MGM has enough positives to stay on the watchlist: revenue growth, better Macau momentum, improving digital losses, and shareholder support for management. But the Las Vegas margin weakness is too important to ignore, and the stock is not cheap enough to buy before that improves.
The key risk is that Las Vegas softness continues while leverage stays high. If Strip margins keep compressing and digital growth does not offset the drag, MGM remains stuck in a low-conviction range.
Action Recap
🎰 Looking to buy? Wait for proof that Las Vegas margins are stabilizing before starting a new position.
📊 Already own it? Hold. China and digital are improving, but the core Vegas story needs to clean up.
⚠️ Main risk to respect: Weak Strip margins plus high leverage can keep the stock capped even if revenue keeps growing.
That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.
Best Regards,
— Adam Garcia
Elite Trade Club
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