What Happened?
Shares of hospitality and casino entertainment company MGM Resorts (NYSE: MGM) jumped 3.8% in the afternoon session after its BetMGM joint venture reported strong third-quarter results and raised its full-year guidance.
BetMGM, co-owned with Entain, saw its third-quarter net revenue jump 23% year-over-year to $667 million. This increase was driven by a 21% rise in iGaming revenue and a 36% surge in online sports revenue. Due to the strong performance, BetMGM lifted its full-year 2025 net revenue forecast to at least $2.75 billion and its expected EBITDA to approximately $200 million. Crucially for investors, the venture also announced it was positioned to distribute at least $200 million in cash to its parent companies, MGM Resorts and Entain, during 2025.
After the initial pop the shares cooled down to $32.88, up 4.1% from previous close.
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What Is The Market Telling Us
MGM Resorts’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock dropped 6% on the news that a report revealed that U.S. consumer confidence dropped for a second consecutive month, hitting a five-month low amid worries over inflation and the job market.
Market volatility increased as a partisan standoff pushed the federal government closer to a shutdown. If lawmakers fail to reach a spending agreement, a shutdown would begin, furloughing thousands of federal workers. This prospect has weighed on investor sentiment, creating a 'risk-off' mood in the markets as traders brace for potential economic disruption. The political uncertainty adds a layer of caution for investors heading into the final day of the month.
Adding to the weakness, a key report showed U.S. consumer confidence unexpectedly fell to a five-month low in September. The Conference Board's consumer confidence index slid to 94.2, a steeper drop than analysts had anticipated and its lowest reading since April. This downturn reflects growing pessimism among Americans about inflation and a weakening job market. Consumer confidence is a closely watched economic indicator as it gauges households' willingness to spend. A decline suggests that consumers may pull back on discretionary purchases, such as dining out or shopping for non-essential goods, which could negatively impact the future revenues and profits of companies in these sectors.
MGM Resorts is down 2.3% since the beginning of the year, and at $32.88 per share, it is trading 21.7% below its 52-week high of $41.99 from October 2024. Investors who bought $1,000 worth of MGM Resorts’s shares 5 years ago would now be looking at an investment worth $1,559.
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