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Red Rock Resorts (RRR)
NASDAQ:RRR
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Red Rock Resorts Inc
(NASDAQ:RRR)
60Neutral
Positive Factors
Financial Performance
Red Rock Resorts reported better than expected EBITDA of $202m, generating margins of 41%.
Growth Potential
Durango trending well ahead of schedule; prompting management to commence the next phase at the property.
Market Positioning
RRR is expected to remain the biggest beneficiary of positive demographic trends in Las Vegas Locals.
Negative Factors
Market Challenges
Growth is muted in 2025 due to tougher comparisons and renovation disruptions.
Market Concerns
Questions remain about the underlying health of the core LV Locals market, despite better results.
Operational Challenges
RRR has three projects that will cause disruption and margin pressure.
Red Rock Resorts Inc (RRR) vs. S&P 500 (SPY)
Market Cap
$4.36B
Dividend Yield2.47%
Average Volume (3M)715.80K
Price to Earnings (P/E)16.2
Beta (1Y)1.23
Revenue Growth12.47%
EPS Growth-14.15%
CountryUS
Employees9,300
SectorConsumer Cyclical
Sector Strength63
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)0.45
Shares Outstanding60,058,277
10 Day Avg. Volume972,158
30 Day Avg. Volume715,797
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.42
Price to Cash Flow (P/CF)7.90
P/FCF Ratio7.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$53.55Price Target Upside31.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Red Rock Resorts Inc Business Overview & Revenue Model
Company DescriptionRed Rock Resorts, Inc., through its interest in Station Holdco and Station LLC, develops and operates casino and entertainment properties in the United States. It operates through two segments, Las Vegas Operations and Native American Management. The company owns and operates 9 gaming and entertainment facilities, and 10 smaller casinos in the Las Vegas regional market. In addition, it manages Graton Resort & Casino in northern California. As of December 31, 2021, it operated approximately 13,894 slot machines, 240 table games, and 3,081 hotel rooms in the Las Vegas market. The company was formerly known as Station Casinos Corp. and changed its name to Red Rock Resorts, Inc. in January 2016. Red Rock Resorts, Inc. was incorporated in 1976 and is based in Las Vegas, Nevada.
How the Company Makes MoneyRed Rock Resorts generates revenue primarily through its casino operations, which include gaming activities such as slot machines, table games, and sports betting. Additional income streams come from hotel accommodations, food and beverage sales, and entertainment offerings at its various properties. The company leverages its strategic location in Las Vegas, attracting both local patrons and tourists. Red Rock Resorts benefits from a diversified revenue model, with a significant portion of its income derived from non-gaming activities, such as hospitality and dining, which complement its core gaming operations. Partnerships and marketing initiatives further enhance its market presence and profitability.
Red Rock Resorts Inc Financial Statement Overview
Summary
Red Rock Resorts demonstrates strong revenue growth and improved cash flows, but is challenged by moderate net profit margins and high leverage. The company must focus on debt management and improving its profit margins to sustain financial health.Income Statement
Red Rock Resorts shows a solid performance with improving revenue and net income over the recent years. The revenue growth rate from 2023 to 2024 was approximately 12.5%, indicating strong growth momentum. The gross profit margin is consistently high, reflecting efficient cost management. However, the net profit margin is moderate, impacted by fluctuations in net income over the periods.75
Positive
Balance Sheet
The balance sheet highlights high leverage, with a substantial amount of debt compared to equity, resulting in a high debt-to-equity ratio. However, the company has improved its equity position over recent years, which is a positive sign. The equity ratio remains low, suggesting potential financial risk if leverage is not managed carefully.50
Neutral
Cash Flow
The cash flow statement shows a positive trend in operating cash flow, with significant growth over the years. The free cash flow has improved substantially from negative in previous years to positive in 2024, indicating enhanced cash generation. The operating cash flow to net income ratio suggests good earnings quality, though the free cash flow to net income ratio is relatively low, indicating room for improvement.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.94B | 1.72B | 1.66B | 1.62B | 1.18B | Gross Profit |
| 1.19B | 1.10B | 1.08B | 1.07B | 681.15M | EBIT |
| 568.69M | 558.69M | 561.30M | 561.44M | 125.88M | EBITDA |
| 744.12M | 694.32M | 722.03M | 718.32M | 300.79M | Net Income Common Stockholders |
| 154.05M | 176.00M | 390.35M | 354.83M | -174.54M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 164.38M | 137.59M | 117.29M | 275.28M | 121.18M | Total Assets |
| 4.05B | 3.95B | 3.35B | 3.14B | 3.74B | Total Debt |
| 52.91M | 3.33B | 2.99B | 2.86B | 2.90B | Net Debt |
| -111.47M | 3.20B | 2.87B | 2.58B | 2.78B | Total Liabilities |
| 3.74B | 3.71B | 3.31B | 3.09B | 3.14B | Stockholders Equity |
| 215.07M | 168.84M | 43.78M | 59.49M | 352.60M |
| Cash Flow | Free Cash Flow | |||
| 548.26M | -207.29M | -19.12M | 544.02M | 154.29M | Operating Cash Flow |
| 548.26M | 494.34M | 542.22M | 609.96M | 212.79M | Investing Cash Flow |
| -321.79M | -653.85M | -442.14M | 586.26M | -69.56M | Financing Cash Flow |
| -199.67M | 179.81M | -290.05M | -1.01B | -150.44M |
Red Rock Resorts Inc Technical Analysis
Negative
40.76
Price Trends
45.82
Negative
46.59
Negative
50.23
Negative
Market Momentum
-1.45
Negative
43.52
Neutral
72.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RRR, the sentiment is Negative. The current price of 40.76 is below the 20-day moving average (MA) of 41.93, below the 50-day MA of 45.82, and below the 200-day MA of 50.23, indicating a bearish trend. The MACD of -1.45 indicates Negative momentum. The RSI at 43.52 is Neutral, neither overbought nor oversold. The STOCH value of 72.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RRR.
Red Rock Resorts Inc Risk Analysis
Red Rock Resorts Inc disclosed 38 risk factors in its most recent earnings report. Red Rock Resorts Inc reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Red Rock Resorts Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.38B | 10.54 | 34.76% | 1.06% | 5.13% | 2.04% | |
66 Neutral | $8.38B | 12.43 | 21.76% | ― | 6.66% | -24.59% | |
63 Neutral | $7.95B | 17.20 | -51.73% | 1.33% | 9.13% | -30.00% | |
60 Neutral | $7.23B | 11.55 | 3.67% | 4.04% | 2.96% | -13.54% | |
60 Neutral | $4.36B | 16.22 | 80.25% | 2.47% | 12.47% | -14.15% | |
46 Neutral | $5.36B | ― | -6.38% | ― | -2.45% | -135.17% | |
44 Neutral | $2.18B | ― | -10.27% | ― | 3.38% | 38.18% |
* Consumer Cyclical Sector Average
Performance Comparison
RRR
Red Rock Resorts Inc
40.76
-16.74
-29.11%
BYD
Boyd Gaming
64.82
1.82
2.89%
MGM
MGM Resorts
28.46
-13.57
-32.29%
PENN
Penn National Gaming
14.27
-1.99
-12.24%
WYNN
Wynn Resorts Limited
73.73
-22.65
-23.50%
CZR
Caesars Entertainment
24.75
-13.77
-35.75%
Red Rock Resorts Inc Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -19.51% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook, with strong financial performance and growth in the Las Vegas operations and Durango Casino Resort, offset by challenges such as decreased adjusted EBITDA margins, sports betting hold impacts, and anticipated disruption from ongoing construction projects. While positive trends in customer engagement and expansions are encouraging, these are balanced by operational and market challenges.Highlights
Record Financial Performance in Las Vegas Operations
Fourth quarter net revenue of $492.6 million, up 7.2% from the prior year's fourth quarter, and adjusted EBITDA of $223.9 million, up 1.6% from the prior year's fourth quarter.
Durango Casino Resort Success
Durango Casino Resort continues to grow with 85,000 new customer sign-ups and remains on track to become one of the highest margin properties.
Strong Free Cash Flow Conversion
Converted 78% of adjusted EBITDA to operating free cash flow, generating $158.6 million or $1.50 per share in the quarter.
Expansion and Renovation Projects
Ongoing expansions at Durango, Sunset Station, and Green Valley Ranch with significant investments in new amenities and casino space.
Positive Market Trends and Customer Engagement
Consistent positive trends across the database, especially in high-end customer segments, with stability anticipated in the core slot and tables business.
Lowlights
Decrease in Adjusted EBITDA Margin
Fourth quarter adjusted EBITDA margin decreased by 250 basis points year-over-year.
Impact of Sports Betting Hold
Unfavorable sports betting hold impacted financial performance, costing $8 million in October and an additional $6 million in December year-over-year.
Backfill Challenges Post-Durango Opening
Revenue cannibalization from Durango affecting Red Rock property, with backfill expected to take two to three years.
Disruption from Ongoing Construction
Anticipated disruption from ongoing construction and renovations, with potential EBITDA impact of $25 million in 2025.
High Costs in Food and Beverage
Elevated food costs, particularly in eggs and proteins, continue to impact margins.
Company Guidance
During the Red Rock Resorts Fourth Quarter and Full Year 2024 Conference Call, the company provided robust guidance and metrics reflecting strong financial performance and strategic plans. For the Las Vegas operations, the fourth quarter net revenue was $492.6 million, a 7.2% increase from the prior year, while adjusted EBITDA reached $223.9 million, up 1.6%, with an adjusted EBITDA margin of 45.4%. On a consolidated basis, full-year net revenue was $1.9 billion, up 12.5%, with adjusted EBITDA at $795.9 million, a 6.7% increase, and an adjusted EBITDA margin of 41%. The Durango Casino Resort showcased significant growth, signing up over 85,000 new customers, and is expected to generate a 16% return in 2024. Capital expenditure for 2025 is projected to range between $375 and $425 million, focusing on expanding casino space and enhancing customer amenities. The company emphasized operational discipline and reinvestment in properties, alongside strategic developments such as the North Fork project and additional tavern openings, aiming for long-term growth in the Las Vegas locals market.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.