The sports betting app sees continued momentum in Q2.
BetMGM, the online sports betting and iGaming arm of MGM Resorts (NYSE:MGM) continues to gain momentum as it seeks to close the gap between industry leaders DraftKings and FanDuel.
On Monday, MGM stock jumped more than 6% after the company raised its guidance for BetMGM for the rest of the fiscal year.
The guidance was boosted due to a better than anticipated second quarter for the betting app. Through June 13, net revenue growth in Q2 across both iGaming and online sports betting was on pace to grow about 34%, on pace with the first quarter.
“This continued strength provides BetMGM increased confidence in its performance for 2025 and as a result BetMGM upgrades its guidance for FY 2025,” MGM officials said in a release.
Now, the company is anticipating fiscal year 2025 net revenue of at least $2.6 billion, up from the previous guidance range of $2.4 billion to $2.5 billion.
Further, the full year EBITDA is now expected to be at least $100 million for BetMGM. This is up from the previous guidance that simply called for fiscal 2025 to be EBITDA positive.
In addition, MGM reiterated that its expectation that online sports betting and iGaming will be “contributionpositive” for FY 2025. It also reaffirmed its confidence that BetMGM is on the path to $500 million in EBITDA in the coming years
“BetMGM remains excited about the significant opportunities ahead,” officials said in the release. “Its strengthened business, revised strategic approach, and performance momentum, further reinforce its confidence in future growth prospects and pathway to $500 million EBITDA in the coming years.”
More details on the second quarter results and full year outlook will be posted when MGM releases its first half update on July 29.
Analysts are bullish on MGM stock
BetMGM is a distant third in the U.S. among sports betting apps with about 6.5% market share in gross gaming revenue and a 7.5% market share in handle.
FanDuel and DraftKings are by far the leaders, with about 40% and 35% market share in gross gaming revenue, and 36% and 35% market share in handle, respectively.
MGM stock is down about 3% year-to-date and has dropped roughly 16% over the past year.
The stock is considered a consensus buy among analysts with a price target of $45 per share, which would suggest a return of about 33% over the current share price. The stock is also cheap, trading at just 14 times earnings.
Investors should know that BetMGM represents just a fraction of MGM’s revenue, with most of it coming from its resorts and casinos. So while these BetMGM projections are promising, investors should look at the larger picture before making any moves.
