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MGM stock: $50 ATH possible?
MGM Stock: $50 ATH Possible?
MGM Resorts International (MGM) is a leading global hospitality and entertainment company that operates a portfolio of destination resort brands, including Bellagio, MGM Grand, Mandalay Bay, and The Mirage. The company has been hit hard by the COVID-19 pandemic, with its stock price dropping from a high of $34.63 in February 2020 to a low of $5.90 in March 2020. However, the stock has been on a steady rise since then, and many investors are wondering if it could reach a new all-time high (ATH) of $50.
There are several factors that could contribute to MGM’s stock price reaching $50 ATH. First, the company has been taking steps to mitigate the impact of the pandemic on its business. It has implemented cost-cutting measures, including furloughs and layoffs, to reduce expenses. It has also been working to diversify its revenue streams by expanding its online gaming offerings and exploring new markets, such as Japan.
Second, the rollout of COVID-19 vaccines could lead to a resurgence in travel and tourism, which would benefit MGM’s business. The company’s resorts are located in popular tourist destinations, such as Las Vegas and Macau, and a rebound in travel could lead to increased revenue and profits.
Third, MGM has a strong balance sheet, with a debt-to-equity ratio of 1.67 and a current ratio of 1.14. This means that the company has the financial resources to weather the pandemic and invest in growth opportunities.
Finally, MGM’s stock price is currently undervalued, with a price-to-earnings ratio of 10.67. This suggests that the market has not fully priced in the company’s growth potential and that there is room for the stock price to rise.
Of course, there are also risks to investing in MGM. The pandemic could continue to impact the company’s business, and there is always the risk of regulatory changes or competition in the gaming industry. However, for investors who are willing to take on some risk, MGM’s stock could be a good opportunity for growth.
In conclusion, while there are no guarantees in the stock market, MGM’s stock price has the potential to reach $50 ATH. The company has taken steps to mitigate the impact of the pandemic, and the rollout of vaccines could lead to a rebound in travel and tourism. Additionally, MGM has a strong balance sheet and is currently undervalued. Investors who are willing to take on some risk could see significant returns from investing in MGM.