MGM 估值偏低，现金流强劲，且 MGM Japan 构成未来重大增长催化剂，适合长期持有。

Lyft, Uber, who are in roughly the same industry, and MGM Resorts. I am buying more of these stocks in 2026. This is because they are very cheap and I think their fundamentals will get better over time.

Number three might be a bit surprising. MGM Resorts. This stock has been considered an incredibly valuable stock for the past few years. They have repurchased about 50 percent of their outstanding shares.

A huge growth project is coming after 4 years. I'm going to talk about that in detail now. But I want to discuss these metrics and explain why the stock rose as much as 50 percent earlier this year.

The reason for this is Barry Diller's company, People Inc. , offered to buy MGM Resorts. They are already large shareholders of the company. Barry Diller is a member of the board of directors.

So he knows the inside story of the company very well. He said, "You know what? I want to buy the whole company." Now, considering the structure of his company and MGM , I don't think this deal made any sense , because you were simply transferring ownership from one public company to another.

This buyout would have required a lot of debt to be successful , so it wasn't very logical. Interest rates are rising. I think this agreement would have been quite difficult to implement.

That doesn't mean that this company today does n't carry great value for investors who are willing to hold it for the next 4 or 5 years.

Share prices have fallen in the past year. But look at its valuation numbers and the future. I want you to pay attention to enterprise value and EBITDA. EBITDA is a proxy we use in the gaming industry because it excludes depreciation, which is a huge expense on the income statement when looking at the costs of operating a casino or resort.

But when you build a casino and spend billions of dollars on it, you don't have to build it again next year or the years after that, although you do have to calculate its depreciation.

So, it is a non-cash expense. This is why we especially like the ratio of EBITDA to enterprise value in this industry. Price to free cash flow also includes cash that comes from businesses that are not consolidated into the income statement and balance sheet.

For example, businesses like BetMGM , which is 50% owned by them and 50% by Entain. It is now generating cash. This will be shown on the Free Cash Flow statement , but it may not be shown in the same way on Adjusted EBITDA.

So look at these multiples, both of which are under eight. Price to free cash flow is only around five. So the valuation looks really interesting.

But why is this a growth story? I want to start with what has happened at MGM Resorts over the past decade. And here you can see the different parts of the business. The color gold is the revenue of the Las Vegas Strip.

Blue is regional business. The purple color is MGM China, their Macau subsidiary. I think they currently own about 54% of this subsidiary. But notice where the growth has occurred.

If we just look at the Las Vegas Strip. Yes, it has decreased a bit in the last few years. There was a huge upsurge right after the pandemic , when people went crazy and rushed to Las Vegas and gambled more than usual.

That's why 2022 and 2023 are showing very good numbers , but over the last 10 years you're talking about a compound annual growth rate of about 5%. It's not too bad. Las Vegas is currently generating more gaming revenue than ever before.

Regional business is also being conducted at a higher level than before. They are actually selling some of the casinos there because they are getting a pretty good price. While this is not a very high-growth business, it is a strong business for financing other growth opportunities, which I will discuss in a moment.

MGM China is a big growth business. After those very terrible years of the pandemic, it has now turned around again. And the other thing that didn't exist a few years ago is their online gaming business.

This is only a picture of the business under their current ownership. These are their majority-owned or 100%-owned shares. This does not actually include the 50/50 joint venture with BetMGM.

If you live in the United States, you've probably seen its advertisements. That's not actually included here. It is mainly focusing on the international market. But you can see that there is growth opportunity for MGM.

And the other thing that didn't exist a few years ago is their online gaming business. This is only a picture of the business under their current ownership. These are their majority- owned or 100% -owned shares.

This does not actually include the 50/50 joint venture with BetMGM. If you live in the United States, you've probably seen its advertisements. That's not actually included here.

It is mainly focusing on the international market. But you can see that there is growth opportunity for MGM.

Cash is coming in from the business, and what are they doing with that money? They are doing a lot of share buybacks, averaging over a billion dollars. One reason why they haven't bought that much stock in the past year or so is that they are financing MGM Japan.

Okay, to understand the matter in context. Market capitalization of $7.5 billion. So if you buyback a billion dollars worth of shares , that would be about 15% of the total shares.

But where is the real growth opportunity ? That will come in 2030 when MGM Japan opens. It is being made in Osaka. It is actually an artificial island near Osaka. This is going to be a property worth about $10 billion.

But how profitable will it be ? How much revenue is possible in a country like Japan, where this is going to be the only legal casino for the next decade or more?

I've been talking about Marina Bay Sands in Singapore for a long time , and now the management is saying the same thing. Japan is larger, richer, and Osaka has a larger population than Singapore.

This is a good example of how much revenue and EBITDA can be generated from that $10 billion asset.

So how much money does Marina Bay Sands make ? Revenue of about $6 billion. But look, adjusted EBITDA of $3 billion. The rules will be slightly different, the tax rates will also be slightly different.

But let's say , with a construction cost of $10 billion and an adjusted EBITDA of $2 to $ 3 billion , you might even take out a loan for that. So they are going to invest billions of dollars in this property over the next few years.

But looking ahead to 2030 and beyond , it could generate $1 billion or more in annual revenue for MGM Resorts. That property could be worth $10 to $ 20 billion , and even the 44% stake held by MGM could be worth the entire market capitalization today.

So I think when you look at MGM stock, you'll see not only that it's got great cash flow coming from its current business, but that business owns about half of the Las Vegas Strip, which is a huge area for people to go to, even though it hasn't been growing much in the last few years.

They have some great regional assets, and they are selling some of them once they get the right price. You have a good position in online gaming, and a big growth opportunity is MGM Japan.

I think it will come in the next few years when the market realizes it's coming. They will then start thinking about what the business figures will be like in 2030, 2031. That's when the share price will turn around , but I'm happy to buy it at a time when management is buying back a lot of shares with the business's cash.