MGM Resorts stock (NYSE: MGM) is set to release its fiscal first-quarter earnings on Wednesday, April 30, 2025, with analysts anticipating earnings of $0.46 per share on $4.28 billion in revenue. This indicates a year-over-year decrease of 31% in earnings and 2% in revenue, in comparison to $0.67 per share and $4.38 billion in the same quarter last year. Historically, the stock has dropped 68% of the time following earnings announcements, with an average one-day decline of 3.4% and a maximum drop of 13%.
Despite short-term challenges, such as macroeconomic pressures and tariff issues, MGM remains committed to long-term growth. The company is focusing on organic expansion in sports and entertainment, supported by refined pricing strategies and strict cost management. With a market capitalization of $9.1 billion, MGM reported $17 billion in revenue over the past twelve months, along with $1.5 billion in operating profit and $747 million in net income. For event-driven traders, historical trends and the discrepancy between actual results and expectations may provide valuable insights prior to the earnings release.
There are two approaches to consider: understand the historical odds and position yourself ahead of the earnings announcement, or analyze the correlation between immediate and medium-term returns after earnings and position accordingly once the earnings are revealed. That being said, if you desire upside with lower volatility than individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and achieved returns of over 91% since its inception.
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MGM Resorts’ Historical Odds Of Positive Post-Earnings Return
Some insights on one-day (1D) post-earnings returns:
- There are 19 earnings data points documented over the past five years, with 6 positive and 13 negative one-day (1D) returns recorded. In summary, positive 1D returns occurred about 32% of the time.
- Notably, this percentage rises to 36% when we look at data for the last 3 years instead of 5.
- The median of the 6 positive returns equals 5.0%, and the median of the 13 negative returns equals -3.4%
Further data on observed 5-Day (5D), and 21-Day (21D) returns post earnings are outlined along with the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively lower-risk strategy (although ineffective if the correlation is weak) is to assess the correlation between short-term and medium-term returns after earnings, identify a pair with the strongest correlation, and execute the suitable trade. For instance, if 1D and 5D exhibit the highest correlation, a trader can place themselves “long” for the next 5 days if the 1D post-earnings return is positive. Here is some correlation data derived from 5-year and 3-year (more recent) history. Note that the correlation 1D_5D indicates the correlation between 1D post-earnings returns and the following 5D returns.
Is There Any Correlation With Peer Earnings?
Occasionally, the performance of peers may impact the stock reaction post-earnings. In fact, pricing-in might start before the earnings announcements. Here is some historical data regarding the past post-earnings performance of MGM Resorts International stock in comparison with the stock performance of peers that reported earnings just prior to MGM Resorts International. For equitable comparison, peer stock returns also reflect post-earnings one-day (1D) returns.
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