Earnings Update: Red Rock Resorts, Inc. (NASDAQ:RRR) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts

Red Rock Resorts, Inc. (NASDAQ:RRR) shareholders are probably feeling a little disappointed, since its shares fell 4.7% to US$50.98 in the week after its latest quarterly results. Red Rock Resorts reported US$489m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.68 beat expectations, being 4.0% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Red Rock Resorts

Taking into account the latest results, the most recent consensus for Red Rock Resorts from 13 analysts is for revenues of US$1.93b in 2024. If met, it would imply a notable 8.6% increase on its revenue over the past 12 months. Statutory earnings per share are expected to plunge 38% to US$1.83 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.94b and earnings per share (EPS) of US$2.67 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$62.50, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Red Rock Resorts at US$71.00 per share, while the most bearish prices it at US$53.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Red Rock Resorts' growth to accelerate, with the forecast 12% annualised growth to the end of 2024 ranking favourably alongside historical growth of 0.9% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 9.7% per year. Red Rock Resorts is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Red Rock Resorts. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Red Rock Resorts going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for Red Rock Resorts (1 shouldn't be ignored!) that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.