Casino operator MGM Resorts International recently entered a new partnership and agreed to acquire a game developer. On Wednesday, MGM Resorts stock reached an important benchmark, with its Relative Strength (RS) Rating entering into the 80-plus percentile with an improvement to 83, a rise from 80 the day before.
The upgraded 83 RS Rating means that MGM Resorts stock outperformed 83% of all stocks over the past year. That's a winning number because market research reveals that the market's top stocks often have an RS Rating north of 80 in the early stages of their moves.
MGM Resorts results have improved recently. The question now is: Can it continue to strengthen?
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MGM Resorts Stock Lifted By Strong Profit Growth
In addition to its Las Vegas casinos, MGM Resorts operates casinos New Jersey, New York, Maryland, Massachusetts and other states, as well as in Macau, a special district in China.
MGM on July 17 announced a long-term agreement with Marriott that creates the MGM Collection with Marriott Bonvoy, which will launch in October. Under terms, some MGM Resorts will be available for booking on the Marriott system. Additionally, on May 1 MGM Resorts said it agree to buy a majority stake in Push Gaming, a digital games maker, for an undisclosed sum.
Among its other ratings, MGM Resorts stock has a decent 78 Composite Rating.
Reflecting strong recent profit growth, MGM has an 81 Earnings Per Share Rating, placing it among the top 19% of companies for recent and long-term earnings growth. Its Accumulation/Distribution Rating is a middling C-, but funds are showing more interest. The number of funds holding MGM Resorts stock rose the past three quarters, from 1,233 in the September 2022 quarter to 1,335 in June.
MGM Up 630% Since Pandemic Started
MGM Resorts stock is resilient. It plunged to 5.90 in March 2020 as Covid stay-at-home guidelines were put in place. From there it's risen an astounding 630% to trade above 43 Wednesday afternoon, up about 1.3% for the day.
While the stock is not near a proper entry right now, see if it goes on to form and break out from a proper base such as a three weeks tight, or bounces off its 50-day or 200-day line.
Strong Bounce This Year
MGM Resorts staged a rebound this year after reporting lower profits last year, although sales continued to grow in 2022. The Las Vegas-based casino operator reported a 59-cent profit last quarter, soaring from a 3-cent profit the same quarter a year earlier. Statistically that's 1,867% earnings growth. And it wasn't a fluke. The quarter before that it recorded 44 cents EPS, up from a 1-cent profit a year earlier. Sales growth the past two quarters came in at 36% and 21%.
MGM Resorts stock holds the No. 5 rank among its peers in the Leisure-Gaming/Equipment industry group. Racetrack and casinos operator Churchill Downs and online sports betting site DraftKings are also among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
IBD's proprietary Relative Strength Rating tracks technical performance by showing how a stock's price action over the last 52 weeks measures up against that of the other stocks in our database.
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