MGM Resorts International walks into its Q2 earnings release today with short sellers adding exposure at a faster pace than at any point in the past month, even as options traders remain notably calm.
Short interest has climbed to 7.3% of the free float — up nearly 12% on the week and the highest reading since late June, when it briefly touched above 9%. The rebuild is sharp: from roughly 17.8 million shares short on July 21 to just over 20 million today. That said, the borrow market is not sending distress signals. Cost to borrow is a modest 0.33%, well down from a month ago, and availability remains extraordinarily loose at over 1,200% — meaning there are more than twelve times as many shares available to lend as are currently borrowed. Short sellers are adding conviction, but they're doing so cheaply and easily. Options traders, meanwhile, are leaning bullish. The put/call ratio of 0.57 sits slightly below its 20-day average and near the 52-week low of 0.55, the opposite of a defensive setup. The ORTEX short score has nudged higher to 52.5 — its highest reading of the past two weeks — but is far from extreme territory.
The Street is more constructive heading into today's print than it has been in years, though not uniformly so. Susquehanna raised its target to $53 this morning, maintaining a Positive rating. JP Morgan holds an Overweight with a $53 target, Macquarie an Outperform at $52. The consensus mean now sits near $50, implying roughly 8% upside from yesterday's $46.20 close. Wells Fargo's upgrade from Underweight to Equal-Weight earlier this month — with a target leap from $33 to $48 — is the clearest signal that the most bearish institutional view has softened materially. Two holdouts remain: Stifel and CBRE both moved to Hold in June. The analyst recommendation divergence factor scores in the 94th percentile, a measure of how bullish the consensus skews relative to the broader universe. Valuation is undemanding on an EV/EBITDA basis at 8.97x, and the forward earnings yield has improved over the past month. The bull case rests on EBITDAR running more than 30% ahead of a year ago, 35% digital revenue growth, and strong group bookings for the rest of 2026. Bears point to non-luxury Strip weakness, margin pressure from insurance accruals, and a revised-down EBITDAR outlook management issued earlier in the year.
Institutional ownership offers one notable data point. People Incorporated — almost certainly a reference to the IAC/InterActiveCorp holding — controls about 26% of shares. IAC added 1 million shares in late March at prices in the $37 range. At today's price that purchase is sitting on a roughly 24% gain, which creates both confidence in the thesis and potential supply overhead if the stock moves higher. Point72 is also a notable new entrant, having added its entire 4.26 million-share position in the first quarter.
The past two earnings reactions for MGM have been muted to negative: the May print saw a 0.5% gain on the day but faded to a 1.3% loss over five sessions, while the April release fell 2% on the day and 3.9% over the following week. Neither print triggered a dramatic move. That history sets a baseline — this is not a stock with a record of violent earnings gaps in either direction.
The key question today is whether the non-luxury Strip softness that weighed on the April and May prints has stabilized, or whether management's downward revisions to its own 2025-2026 EBITDAR estimates prove to have been conservative enough. The divergence between a rebuilding short position and a call-heavy options market makes the reaction to the actual number the only thing worth watching.
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