MGM Resorts International (NYSE:MGM) has confirmed that it was hit by a cybersecurity breach on September 11, 2023, leading to unauthorized third-party access to customer data and impacting specific systems. The company responded swiftly by implementing protective measures, temporarily shutting down affected systems, and launching an investigation in collaboration with cybersecurity experts and law enforcement.
The operational challenges faced in September are expected to negatively influence Q3 results, particularly for Las Vegas Strip Resorts and Regional Operations. The estimated impact on Adjusted Property EBITDAR is approximately $100 million. Despite this setback, MGM Resorts anticipates minimal impact on its fourth-quarter performance, supported by its strong earnings, which, according to InvestingPro Tips, should allow management to continue dividend payments.
Looking forward, the company is optimistic about its recovery. MGM predicts record results in November, driven by Formula 1 events. The company also forecasts an occupancy rate rebound to 93% in October, signaling a strong recovery from the cybersecurity incident. This positive outlook aligns with InvestingPro Tips that suggest the company will be profitable this year.
MGM incurred one-time expenses of less than $10 million in Q3 for technology consulting services, legal fees, and third-party advisors related to the cybersecurity breach. However, the company's cybersecurity insurance is expected to cover the financial impact of disruptions and future costs associated with the incident.
Over the past year, MGM's stock has gained 6.5%, leading to a Zacks Rank #3 (Hold). The company is hopeful for a full recovery by November, indicating confidence in its resilience and ability to bounce back from this incident. The InvestingPro data shows that MGM has a market cap of $12.83 billion and a P/E ratio of 37.61. This suggests that the company is trading at a high earnings multiple, which is in line with the InvestingPro Tips. The data also shows a 1-year price total return of 4.42%, slightly lower than the 6.5% gain mentioned earlier.
For more insights and tips, visit InvestingPro, which offers 12 more tips specifically for MGM. These tips are part of a comprehensive package offered by InvestingPro that provides real-time metrics and tips to aid in investment decisions.
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