Equity Snapshot: MGM’s FCF Power, HOOD’s User Growth Gap, SPOT’s Margin Gains vs Growth Uncertainty
1. $MGM Resorts International(MGM)$
$MGM is generating enough free cash flow to buy back ~15% of shares outstanding each year. But there are major tailwinds ahead.
1. Macau gaming revenue is up 14.3% YTD and the COVID recovery is gaining momentum.
2. Online gaming is reaching an inflection point.
3. MGM Japan opens in 2030 and may be the most profitable casino in the world, providing over $1 billion in cash flow to MGM from Day 1.
I like the risk/reward.
2. $Robinhood(HOOD)$
Robinhood's biggest challenge in 2026 is user growth.
We know another 400k customers have been added thru February, but growth needs to pick up for the stock to move higher.
The long-term growth thesis relies on (1) user growth AND (2) user wealth growing as they age.
Right now, #2 is going well, but #1 isn't holding ground with competitors.
3. $Spotify Technology S.A.(SPOT)$
Spotify has squeezed more out of gross margin than I thought they could and done a really nice job controlling operating expenses -> operating leverage.
The question is: What's next?
- Ads are an option, but have been disappointing.
- Audiobooks haven't moved the needle
- What's up with video?!?
I'm a shareholder, but if revenue growth doesn't pick up and/or margins improve the stock could be stuck for a while.
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