📈 Resilient Trader Trade Idea: The Las Vegas Reacceleration Play on MGM Resorts (MGM)

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Resilient Trader is where smart traders come for vetted ideas.

Every week, we cut through the noise and surface opportunities that institutions are already eyeing - but with strategies tailored for retail traders. Today’s setup? A hospitality giant poised for a powerful reacceleration, even as the market remains skeptical.

We’ll cover:

• Why MGM Resorts is a Buy at current levels

• How to generate income and capture upside with a covered call strategy

🔍 Trade Thesis: The House Is Positioned to Win as Las Vegas Roars Back

MGM Resorts International (MGM) has been a battleground stock, but we believe the tide is turning. After a period of underperformance, the company is showing clear signs of accelerating growth, particularly in its core Las-Vegas-Strip operations. We see a clear path to the mid-to-high $40s, representing a 20-30% upside from current levels.

Behind the scenes:

🎰 Las Vegas Reaccelerating: January showed significant rate-of-change improvement after a soft December, and the convention calendar for February, March, and April is stacked, setting the stage for accelerating growth trends.

MGM management was humbled by last year's underperformance and were more balanced in their recent earnings commentary. They admitted easier comparisons and see expected growth with catalysts in hand. We upside potential to mid-to-high $40s representing 20-30% gains; reacceleration story against loathed stock.

🌏 MGM China is a powerhouse: Delivering record-breaking results with a 28% increase in revenue, capitalizing on the Macau recovery.

💻 BetMGM is turning the corner: The digital arm is on track to achieve profitability in 2025, unlocking a significant, previously untapped earnings stream.

📊 The Fundamentals Are Solidifying

Let’s break it down:

💰 Revenue: A record $17.2B in 2024, up 7% YoY, with Q4 2024 revenue at $4.61B, up 5.9% YoY.

📈 Comparable Sales: While the Las Vegas Strip was soft in 2025, January 2026 showed a return to growth, and the convention calendar points to a strong Q1.

📦 Profitability: Operating margin is a healthy 7.06%, and with BetMGM turning profitable, we expect margins to expand.

💵 Shareholder Returns: The company repurchased $1.4B of stock in 2024, a strong signal of management’s belief in the stock's value.

📐 Valuation Is Compelling

MGM is priced for skepticism, not for the reacceleration we see coming:

⚖️ EV/EBITDA: At 22.68, it's higher than some peers, but this is skewed by the asset-light model. On a forward basis, it's much more attractive.

🏷️ Price/Book: At 4.05, it's reasonable for a company with its brand and asset portfolio.

📈 P/E Ratio: The trailing P/E of 50.08 is misleading due to a depressed 2025 earnings base. The forward P/E is significantly lower, making the stock look cheap.

🧭 Technicals Signal a Bullish Turn

✅ Above key moving averages: Trading above the 50-day ($36.09) and 200-day ($35.01) moving averages, a classic bullish signal.

✅ Positive Momentum: The MACD is positive (0.360) and the RSI is at a healthy 55.86, indicating upward momentum without being overbought.

✅ Support at $35: The stock has established a solid base of support around the $35 level.

🎯 Targets: $40 (initial), $45 (intermediate)

💥 Trade of the Week: Buy the Stock, Sell the Calls

We’re combining a long equity position with a covered call strategy to generate income and define our exit.

🟢 Trade Setup

• Buy $MGM ( ▼ 2.49% )  at $37.36 or better

🛡️ Options Play

• Sell the March 20th $40 Call for $0.76

  • Net debit: This reduces your cost basis on the stock to $36.60

📈 Risk-Reward

• Max Risk: $36.60 (your net cost for the stock)

• Max Reward: $3.40 (if the stock is called away at $40) + $0.76 (premium received) = $4.16, a 11.3% return in about a month.

• Breakeven: $36.60

• Strategy: Continue to sell monthly 30-delta calls until the stock is called away, generating a steady stream of income.

🛑 Risk Management Tip

Set a stop-loss at $34.50 to protect your downside while giving the trade room to work.

🚀 Catalysts on the Horizon

Keep your eyes on:

1. Q1 2026 Earnings: Strong results from the Las Vegas convention season could be a major catalyst.

2. BetMGM Profitability: Confirmation of a profitable quarter for BetMGM would be a huge sentiment boost.

3. Analyst Upgrades: As the reacceleration story takes hold, we expect more analysts to upgrade their ratings and price targets.

4. Short Squeeze: With 15.18% of the float short, any positive news could trigger a powerful short squeeze.

🧠 Final Thoughts

MGM is a compelling turnaround story that the market is overlooking. The combination of a reaccelerating Las Vegas Strip, a powerful China growth engine, a soon-to-be-profitable digital business, and a shareholder-friendly management team makes this a high-conviction buy.

✅ Buy MGM at $37.36
💸 Sell the March 20th $40 Call for $0.76

We'll be watching this one closely.

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