What happened

Shares of MGM Resorts International (NYSE:MGM) gained 21.4% in value last month, according to data provided by S&P Global Market Intelligence. The stock underperformed the S&P 500 in 2018, as the company reported uninspiring operating performance on the top and bottom line. 

However, January was full of positive news from the company, which along with the rebound in the broader market sent its shares soaring to start the new year.

A slot machine in a casino.


So what

In early January, management laid out its MGM 2020 plan, which calls for cost cuts and improvements in operating efficiency to position the company for long-term growth. The company is targeting an increase in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $300 million by the end of 2021. This plan will also lay the groundwork for the company's digital transformation to grow revenue. 

Also, at the end of January, the company completed the transaction to acquire Empire City Casino in Yonkers, New York. The deal gives MGM a solidified position in the high-density area of New York City and diversifies the company's revenue. 

Additionally, MGM announced the formation of a committee to evaluate how to maximize the value of its owned real estate. This is consistent with management's strategy to grow free cash flow per share and position the company for growth. 

Check out the latest MGMearnings call transcript.

Now what

MGM will announce fourth-quarter earnings results on Feb. 13. Analysts expect adjusted earnings per share of $0.11 and full-year earnings of $1.13 per share. That would represent growth of 14% over 2017. As for revenue, analysts forecast the company to report $12.87 billion, representing an increase of 10% year over year.

One reason the stock underperformed last year was the delay in ramping up Park MGM and Mandalay Bay, which contributed to lower revenue growth and weighed on the bottom line. Improved operating performance in those specific properties would help MGM bounce back in 2019.