Let's face it, 2022 has been a tough year for investors. And with its stock price down by 24% year to date, MGM Resorts (MGM 1.35%) hasn't escaped the carnage. But while these declines price in near-term macroeconomic challenges, the company's long-term thesis remains intact.

Let's discuss two reasons why shares in this dirt-cheap gambling giant look poised to skyrocket over the long term. 

MGM Resorts' business is booming

As a tourism company, MGM Resorts was hit hard by the COVID-19 pandemic, which dramatically reduced tourism traffic in 2020 and 2021. But now the company is bouncing back from the crisis with a vengeance. 

Third-quarter revenue soared 26% to $3.4 billion, which is slightly higher than the $3.3 billion generated in the corresponding period of 2019. The surge has been led by strength on the Las Vegas Strip, where MGM owns high-profile assets like MGM Grand and Mandalay Bay. And it is boosting its profile by acquiring new assets such as The Cosmopolitan, which it acquired for $1.6 billion in May 2022. But MGM's growth strategy isn't limited to just acquiring already existing assets. 

In 2021, the company and its joint venture partner Orix were selected as regional resort partners to potentially build an integrated casino resort in Osaka, Japan. If the deal goes through, management believes it could generate up to $775 million in annual tax revenue for the city, which implies significant profits for MGM and its partner. 

China could eventually recover

MGM's Chinese segment, which operates a portfolio of resorts in Macao, has been slower to recover from the crisis -- mainly because of extremely restrictive Chinese government policy. MGM China's third-quarter sales are still down 88% to $87 million against the corresponding period of 2019. With U.S. operations performing so well, it's tempting to write off the Chinese subsidiary. But there could be good news on the horizon. 

Macao, China at night.

Image source: Getty Images.

In December, the Chinese government eased its zero-COVID policy, opening the door for a recovery in Macao over the subsequent quarters. A full recovery could potentially be a game-changer. In 2019, MGM's Chinese properties generated a whopping $2.9 billion in sales and $735 million in adjusted EBITDA.

The valuation looks too good to ignore

With a trailing price-to-earnings multiple of 12, MGM Resorts stock is significantly cheaper than the S&P 500 average of around 20. The low price tag probably has much to do with the stock's significant drop this year. The market is pricing in macroeconomic uncertainties like rising Federal Reserve interest rates and a possible recession, which could hurt the market for the luxury experiences offered by casinos and resorts.

With that said, the lower stock price could also be an opportunity for investors to bet on a quality company at a discount and take advantage of its ambitious growth strategy and the possible recovery in Macao. MGM Resorts may not stay this cheap for long.