Red Rock Resorts (RRR) AI Stock Analysis

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Red Rock Resorts

(NASDAQ:RRR)

Rating:69Neutral

Price Target:

$49.00

▼(-2.08%Downside)

Red Rock Resorts' overall score reflects strong financial performance and a positive outlook from the latest earnings call. However, high financial leverage and mixed technical indicators moderate the overall score. Strategic initiatives and shareholder returns are promising, but the company must manage leverage and operational challenges effectively.

Positive Factors

Earnings

Red Rock Resorts reported better than expected EBITDA of $202m, generating margins of 41%.

Outlook

The growth pipeline remains robust, offering investors a way to own the high-end Las Vegas locals market.

Negative Factors

Comparisons

Growth is muted in 2025 due to tougher comparisons and renovation disruptions.

Market Conditions

Questions remain about the underlying health of the core LV Locals market, despite better results.

Red Rock Resorts (RRR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$5.24B

Dividend Yield2%

Average Volume (3M)716.34K

Price to Earnings (P/E)21.7

Beta (1Y)1.19

Revenue Growth9.48%

EPS Growth-11.92%

CountryUS

Employees9,300

SectorConsumer Cyclical

Sector Strength63

IndustryGambling, Resorts & Casinos

Share Statistics

EPS (TTM)0.43

Shares Outstanding60,092,342

10 Day Avg. Volume677,426

30 Day Avg. Volume716,342

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 Cap1.13

Enterprise Value/Revenue0.79

Enterprise Value/Gross Profit5.05

Enterprise Value/Ebitda1.97

Forecast

1Y Price Target

$48.86

Price Target Upside-2.36% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering8

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 through multiple streams, primarily from its casino operations, which include slot machines, table games, and sports betting. Additionally, the company earns income from hotel accommodations, food and beverage sales, and entertainment offerings at its properties. A significant portion of its revenue comes from the local Las Vegas market, where it positions itself as a leading provider of gaming and hospitality experiences. Red Rock Resorts also benefits from strategic partnerships and marketing agreements that enhance its customer base and brand visibility. These diversified revenue streams and its focus on operational efficiency contribute to the company's financial performance.

Red Rock Resorts Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: 20.90%|

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.

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

Positive

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.

Balance Sheet

Neutral

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.

Cash Flow

Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Positive

Last Price50.04

Price Trends

50DMA

43.60

Positive

100DMA

45.16

Positive

200DMA

47.59

Positive

Market Momentum

MACD

1.68

Negative

RSI

66.62

Neutral

STOCH

80.80

Negative

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 50.04 is above the 20-day moving average (MA) of 47.62, above the 50-day MA of 43.60, and above the 200-day MA of 47.59, indicating a bullish trend. The MACD of 1.68 indicates Negative momentum. The RSI at 66.62 is Neutral, neither overbought nor oversold. The STOCH value of 80.80 is Negative, 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BYD	78 Outperform	$5.96B	11.97	35.62%	0.93%	6.06%	10.05%
RRR	69 Neutral	$5.24B	21.74	81.59%	2.00%	9.48%	-11.92%
MGM	68 Neutral	$8.67B	14.27	21.38%	―	2.76%	-14.31%
Sector *	62 Neutral	$6.88B	11.32	2.95%	3.87%	2.70%	-24.57%
WYNN	59 Neutral	$8.70B	22.72	-51.73%	1.20%	-0.08%	-48.66%
CZR	59 Neutral	$5.35B	―	-5.56%	―	-1.25%	-130.83%
PENN	57 Neutral	$2.36B	―	-2.81%	―	5.51%	92.46%

* Consumer Cyclical Sector Average

Performance Comparison

RRR

Red Rock Resorts

50.04

1.40

2.88%

BYD

Boyd Gaming

74.08

22.25

42.93%

MGM

MGM Resorts

31.86

-8.91

-21.85%

PENN

Penn National Gaming

15.59

-1.66

-9.62%

WYNN

Wynn Resorts

83.30

-8.53

-9.29%

CZR

Caesars Entertainment

25.73

-10.65

-29.27%

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.