The past year was just about a perfect storm for travel and leisure businesses. MGM Resorts International (NYSE:MGM) stock experienced a colossal drop of more than 75% during the March panic at the onset of the pandemic.
The company's revenue ticked back up in its third quarter, which ended Sept. 30, but was still 66% below the comparable period in 2019.
However, the hint of a recovery in the traditional casino business, along with potential in its online gambling and sports betting business, have shares nearing breakeven for the year. It's likely that momentum will continue in 2021.
The casino operator's BetMGM online wagering app was launched in 2018 and has been steadily expanding into more U.S. states. The app is a joint venture of MGM and GVC Holdings (LSE:ENT). This month, the company launched online casino gambling and mobile sports betting in Pennsylvania. MGM followed that up with an agreement to become the official sports betting partner of the NBA's Philadelphia 76ers, just one of numerous deals the company now has with professional sports franchises.
It is still the physical hotel and casino business that moves the needle for MGM. As its casinos in Macao and Las Vegas, as well as regional properties, eventually get back to pre-pandemic levels, there is more room for the stock to recover, too.
Not all of the hardest-hit industries are yet on a solid path to recovery. Cruise operators and movie theater owners come to mind. But with the rollout of the vaccine over the course of the next year, casinos will continue the rebound that has already begun. Add in a presence in the fast-growing sports betting sector, and MGM Resorts looks to be a top bet for 2021.