Using an unlevered Free Cash Flow to Firm (FCFF) model, we project MGM Resorts International's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 0.9% to 16.0% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 28, DPO 19, DIO 6). At a 5.0% WACC with mid-year discounting, the terminal value (87% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 18.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $163.19 per share, suggesting MGM is undervalued by 335.3% at the current price of $37.49.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 2,504 | 2,542 | 2,592 | 3,008 | 3,489 | 3,577 |
| (−) Net Interest | 729 | 740 | 754 | 875 | 1,015 | 1,041 |
| (+) D&A | 881 | 992 | 1,050 | 1,079 | 1,099 | 1,127 |
| EBITDA | 4,115 | 4,274 | 4,397 | 4,962 | 5,604 | 5,744 |
| (−) Tax | 493 | 501 | 511 | 592 | 687 | — |
| (−) CapEx | 1,041 | 1,057 | 1,078 | 1,250 | 1,451 | — |
| (−) ΔWC | -24 | 15 | 20 | 169 | 197 | — |
| Free Cash Flow (FCF) | 2,604 | 2,700 | 2,788 | 2,950 | 3,269 | — |
| Peers' EBITDA Multiple | 18.8x | |||||
| Terminal Value | 108,100 | |||||
| WACC / Discount Rate | 5.00% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,541 | 2,510 | 2,468 | 2,487 | 2,625 | 84,700 |
| Enterprise Value | 97,329 | |||||
| Projection Period | 12,630 | 13.0% | ||||
| Terminal Value | 84,700 | 87.0% | ||||
| (−) Current Net Debt | 54,093 | |||||
| Equity Value | 43,237 | |||||
| (÷) Outstanding Shares | 265M | |||||
| Fair Price | $163 | +335.4% | ||||
| WACC \ EV/EBITDA Exit Multiple | 14.8x | 16.8x | 18.8x | 20.8x | 22.8x |
|---|---|---|---|---|---|
| 3.0% | $123 | $160 | $198 | $235 | $273 |
| 4.0% | $109 | $144 | $180 | $216 | $251 |
| 5.0% | $95 | $129 | $163 | $197 | $231 |
| 6.0% | $82 | $115 | $147 | $180 | $212 |
| 7.0% | $70 | $101 | $132 | $163 | $194 |
Current price: $37.49. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.