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Red Rock Resorts (RRR)
NASDAQ:RRR

Red Rock Resorts (RRR) AI Stock Analysis

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Red Rock Resorts

(NASDAQ:RRR)

Rating:69Neutral
Price Target:
$49.00
▲(0.43%Upside)
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)

Red Rock Resorts Business Overview & Revenue Model

Company DescriptionRed Rock Resorts, Inc. (RRR) is a prominent gaming, development, and management company based in Las Vegas, Nevada. The company primarily operates through its subsidiary, Station Casinos LLC, and is known for its extensive portfolio of casino and entertainment properties. Red Rock Resorts focuses on providing a wide range of gaming and hospitality services, including casino games, hotel accommodations, dining options, and entertainment experiences. Its properties cater to both locals and tourists, offering a mix of luxury and casual settings.
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: 17.88%|
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 shows strong revenue growth and operational margins, indicative of effective cost control and business strategy. However, the high leverage ratio is a concern, potentially impacting financial flexibility and increasing risk. Cash flows are robust, supporting liquidity and investment capacity. The company should focus on reducing leverage to enhance financial stability while maintaining its strong operational performance.
Income Statement
75
Positive
The income statement reveals a stable revenue growth, with a TTM revenue increase of 0.46% compared to the previous annual figure. Gross profit margin remains solid at approximately 61.5% in TTM, indicating efficient cost management. The net profit margin is slightly lower at 8.0% due to high operational costs. Positive EBIT and EBITDA margins of 29.1% and 39.0% respectively, suggest robust operational performance. However, the net income shows a decline from previous periods, signaling potential profitability challenges.
Balance Sheet
60
Neutral
The balance sheet shows a high debt-to-equity ratio of 13.76, reflecting significant leverage which poses financial risk. Stockholders' equity is rising but remains relatively low compared to total assets, resulting in an equity ratio of 6.0%. The return on equity is strong at 63.1%, driven by both operational profit and high leverage. Despite the high debt, the company seems to manage its liabilities effectively, but there is a need for cautious debt management to maintain financial stability.
Cash Flow
70
Positive
Cash flow analysis indicates a healthy operating cash flow with a TTM operating cash flow to net income ratio of 3.51, suggesting efficient conversion of income into cash. Free cash flow has improved, with a 11.89% growth rate, reflecting better capital expenditure management. However, the free cash flow to net income ratio is 1.79, showing some room for improvement in cash generation relative to net income.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.95B1.94B1.72B1.66B1.62B1.18B
Gross Profit
1.20B1.19B1.10B1.08B1.07B681.15M
EBIT
567.52M568.69M558.69M561.30M401.54M88.59M
EBITDA
759.00M744.12M694.32M722.03M546.54M300.79M
Net Income Common Stockholders
155.97M154.05M176.00M205.46M241.85M-150.40M
Balance SheetCash, Cash Equivalents and Short-Term Investments
150.63M164.38M137.59M117.29M275.28M121.18M
Total Assets
4.09B4.05B3.95B3.35B3.14B3.74B
Total Debt
3.40B3.41B3.33B2.99B2.86B2.90B
Net Debt
3.25B3.25B3.20B2.87B2.58B2.78B
Total Liabilities
3.72B3.74B3.71B3.31B3.09B3.14B
Stockholders Equity
247.07M215.07M168.84M43.78M59.49M352.60M
Cash FlowFree Cash Flow
279.04M249.42M-207.29M-19.12M544.02M154.29M
Operating Cash Flow
548.03M548.26M494.34M542.22M609.96M212.79M
Investing Cash Flow
-314.33M-321.79M-653.85M-442.14M586.26M-69.56M
Financing Cash Flow
-212.77M-199.67M179.81M-290.05M-1.01B-150.44M

Red Rock Resorts Technical Analysis

Technical Analysis Sentiment
Positive
Last Price48.79
Price Trends
50DMA
44.13
Positive
100DMA
45.32
Positive
200DMA
47.50
Positive
Market Momentum
MACD
1.30
Positive
RSI
58.75
Neutral
STOCH
37.55
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 48.79 is above the 20-day moving average (MA) of 48.22, above the 50-day MA of 44.13, and above the 200-day MA of 47.50, indicating a bullish trend. The MACD of 1.30 indicates Positive momentum. The RSI at 58.75 is Neutral, neither overbought nor oversold. The STOCH value of 37.55 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
BYBYD
78
Outperform
$6.11B12.2535.62%0.96%6.06%10.05%
MGMGM
73
Outperform
$9.04B14.8421.38%2.76%-14.31%
RRRRR
69
Neutral
$5.20B21.5781.59%2.05%9.48%-11.92%
63
Neutral
$9.06B23.66-51.73%1.14%-0.08%-48.66%
63
Neutral
$6.94B11.342.80%4.26%2.68%-24.70%
CZCZR
59
Neutral
$5.80B-5.56%-1.25%-130.83%
57
Neutral
$2.53B-2.81%5.51%92.46%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RRR
Red Rock Resorts
48.79
-0.87
-1.75%
BYD
Boyd Gaming
75.30
22.04
41.38%
MGM
MGM Resorts
33.14
-6.71
-16.84%
PENN
Penn National Gaming
16.48
-0.92
-5.29%
WYNN
Wynn Resorts
87.07
-0.73
-0.83%
CZR
Caesars Entertainment
27.31
-8.72
-24.20%

Red Rock Resorts Corporate Events

Shareholder Meetings
Red Rock Resorts Holds Annual Stockholders Meeting
Neutral
Jun 10, 2025

Red Rock Resorts held its Annual Meeting of Stockholders on June 5, 2025, where shareholders voted on several key proposals. All nominated directors were elected, the ‘say-on-pay’ proposal was approved on an advisory basis, and the ratification of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, was confirmed.

The most recent analyst rating on (RRR) stock is a Hold with a $51.00 price target. To see the full list of analyst forecasts on Red Rock Resorts stock, see the RRR Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.