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Red Rock Resorts (RRR)
NASDAQ:RRR
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Red Rock Resorts
(NASDAQ:RRR)
68Neutral
Positive Factors
Financial Performance
Red Rock Resorts reported better than expected EBITDA of $202m, generating margins of 41%.
Growth Potential
The growth pipeline remains robust, offering investors a way to own the high-end Las Vegas locals market.
Market Outlook
The Super Bowl had a positive outcome for the sports book, contributing to a better outlook.
Negative Factors
Growth Challenges
Growth is muted in 2025 due to tougher comparisons and renovation disruptions.
Market Comparisons
There is caution regarding the first half of '25 as Red Rock Resorts laps the opening of Durango, which could create harder comparisons.
Market Health
Questions remain about the underlying health of the core LV Locals market, despite better results.
Red Rock Resorts (RRR) vs. S&P 500 (SPY)
Market Cap
$5.00B
Dividend Yield2.12%
Average Volume (3M)689.30K
Price to Earnings (P/E)20.7
Beta (1Y)1.21
Revenue Growth9.48%
EPS Growth-11.92%
CountryUS
Employees9,300
SectorConsumer Cyclical
Sector Strength74
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)0.43
Shares Outstanding60,092,342
10 Day Avg. Volume613,594
30 Day Avg. Volume689,296
Financial Highlights & Ratios
PEG Ratio-0.70
Price to Book (P/B)12.22
Price to Sales (P/S)0.00
P/FCF Ratio10.91
Enterprise Value/Market Cap1.18
Enterprise Value/Revenue0.79
Enterprise Value/Gross Profit5.05
Enterprise Value/Ebitda1.97
Forecast
1Y Price Target
$46.50Price Target Upside-1.27% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Red Rock Resorts 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 Financial Statement Overview
Summary
Red Rock Resorts exhibits a robust revenue growth trajectory with improved profitability, despite moderate net profit margins. The company faces challenges with high leverage but shows improving equity and cash flow positions. Continued focus on debt management and margin improvement will be crucial for sustained 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 |
| 3.41B | 3.33B | 2.99B | 2.86B | 2.90B | Net Debt |
| 3.25B | 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 | |||
| 249.42M | -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 Technical Analysis
Positive
47.10
Price Trends
42.33
Positive
44.59
Positive
47.88
Negative
Market Momentum
1.39
Negative
70.18
Negative
76.93
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RRR, the sentiment is Positive. The current price of 47.1 is above the 20-day moving average (MA) of 43.18, above the 50-day MA of 42.33, and below the 200-day MA of 47.88, indicating a neutral trend. The MACD of 1.39 indicates Negative momentum. The RSI at 70.18 is Negative, neither overbought nor oversold. The STOCH value of 76.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RRR.
Red Rock Resorts Risk Analysis
Red Rock Resorts disclosed 38 risk factors in its most recent earnings report. Red Rock Resorts 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 Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $6.18B | 12.40 | 35.62% | 0.91% | 6.06% | 10.05% | |
73 Outperform | $9.24B | 15.22 | 21.38% | ― | 2.76% | -14.31% | |
68 Neutral | $5.00B | 20.72 | 81.59% | 2.12% | 9.48% | -11.92% | |
62 Neutral | $6.38B | ― | -5.56% | ― | -1.25% | -130.83% | |
61 Neutral | $6.98B | 11.35 | 2.88% | 3.90% | 2.65% | -21.84% | |
57 Neutral | $10.12B | 26.41 | -51.73% | 1.03% | -0.08% | -48.66% | |
53 Neutral | $2.42B | ― | -2.81% | ― | 5.51% | 92.46% |
* Consumer Cyclical Sector Average
Performance Comparison
RRR
Red Rock Resorts
47.10
-2.10
-4.27%
BYD
Boyd Gaming
75.91
21.38
39.21%
MGM
MGM Resorts
33.97
-7.39
-17.87%
PENN
Penn National Gaming
16.01
-0.26
-1.60%
WYNN
Wynn Resorts
96.76
0.20
0.21%
CZR
Caesars Entertainment
30.70
-4.24
-12.14%
Red Rock Resorts Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: 13.80%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, successful project developments, and shareholder returns, but also acknowledged challenges like cannibalization effects, insurance costs, and construction disruptions. Overall, the positive aspects significantly outweigh the negative, showcasing a robust business outlook.Q1-2025 Updates
Positive Updates
Record First Quarter Revenue and EBITDA
Las Vegas operations achieved its highest first quarter net revenue and adjusted EBITDA in history, with net revenue of $495 million (up 1.9%) and adjusted EBITDA of $235.9 million (up 2.7%).
Durango Casino & Resort Performance
Durango Casino & Resort continues strong momentum, adding over 95,000 new customers and achieving a net return of nearly 16% through the first quarter of 2025.
Construction Progress and Expansion Plans
Construction continues on the next phase of the Durango Master Plan, including additional casino space and a new parking garage, with completion expected in December.
Hotel and Food and Beverage Division Success
Both divisions achieved record performance in the first quarter, driven by increased occupancy and higher cover counts.
Successful Financing for North Fork Project
The $750 million financing package for the North Fork project was successfully closed, providing a significant reduction in capitalized interest expense.
Special Cash Dividend Announced
A special cash dividend of $1 per Class A common share was declared, reflecting the Board's confidence in the business model.
Strong Balance Sheet and Capital Return
Returned approximately $159 million to shareholders in 2025 after the special and regular dividends.
Negative Updates
Cannibalization Impact from Durango
Some cannibalization occurred at the Red Rock property due to Durango's opening, though revenue backfill is ahead of pace.
Utility Costs and Insurance Headwinds
While utility costs were down significantly, insurance costs are expected to remain a headwind throughout 2025.
Construction Disruption at Existing Properties
Disruption expected at Sunset Station, Green Valley Ranch, and Durango due to ongoing construction and renovations.
Challenging Group Sales and Catering Comparisons
Faced a tough year-over-year comparison in Group sales and catering, though positive momentum is expected for the rest of 2025.
Company Guidance
During Red Rock Resorts' first quarter 2025 conference call, the company reported record financial performance in its Las Vegas operations, achieving its highest first quarter net revenue of $495 million, up 1.9% from the previous year, and adjusted EBITDA of $235.9 million, up 2.7%. The adjusted EBITDA margin reached 47.7%, a 34 basis point increase. On a consolidated basis, net revenue was $497.9 million, with an adjusted EBITDA of $215.1 million, reflecting a 2.8% increase and a 43.2% margin, up 42 basis points. The company highlighted the continued growth of the Durango Casino & Resort, adding over 95,000 new customers to its database and achieving a return net of cannibalization of nearly 16%. Red Rock Resorts also discussed ongoing expansions, including a $120 million project at Durango, as well as renovations at Sunset Station and Green Valley Ranch, with total capital expenditures for 2025 expected to range between $350 million and $400 million. The company ended the quarter with $150.6 million in cash, $3.4 billion in total debt, and a net debt-to-EBITDA ratio of 4.1 times. Red Rock declared a special dividend of $1 per Class A share, reflecting confidence in its business model and long-term growth prospects 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.