People Inc. has demonstrated a compelling financial turnaround, with its investment in MGM Resorts International now surpassing its own market value. The company's publishing segment is experiencing a positive trend, evidenced by a significant rise in Q2 adjusted EBITDA and an optimistic outlook for 2026. This improved performance, coupled with strategic asset sales, bolsters the company's cash position and underscores its intrinsic value, positioning it as an attractive investment opportunity.

In mid-July 2026, we initiated coverage on People Incorporated, an organization whose recent financial disclosures warrant further examination. The company's latest quarterly report for the second quarter highlighted several key performance indicators that signal a healthy and expanding enterprise. A particularly noteworthy aspect is the current valuation of People Inc.'s 66.8 million-share holding in MGM, which, at prevailing market prices, represents approximately $2.9 billion. This figure alone exceeds People Inc.'s market capitalization of $2.86 billion, suggesting that the market may not fully appreciate the value embedded within its assets.

Furthermore, People Inc.'s publishing business has shown considerable improvement. The adjusted EBITDA for the second quarter reached $73 million, indicating operational efficiency and a strong recovery in this sector. Management has also raised its EBITDA guidance for 2026, projecting continued positive momentum. This upward revision reflects confidence in the company's strategic initiatives and its ability to generate sustainable earnings growth. The estimated net proceeds from a recently announced $189 million LP-interest sale are expected to further enhance the company's financial flexibility, bringing the holdco cash to an estimated $939 million. This substantial cash reserve provides a solid foundation for future investments or shareholder returns.

The company's robust free cash flow in the first half of the year has contributed to a healthier balance sheet, facilitating further deleveraging. Despite these positive developments, People Inc. is currently trading at a 40% discount to its net asset value (NAV). This valuation gap implies a potential upside of 66.8% to our target price. Given this significant undervaluation and the strong operational and financial improvements, our rating recommendation for People Inc. has been elevated to a 'strong buy'.

In conclusion, People Inc. presents a compelling investment case, underscored by its valuable MGM stake, a revitalized publishing business, robust cash generation, and a substantial discount to its intrinsic value. These factors collectively suggest a strong growth trajectory and significant potential for shareholder appreciation.