Red Rock Resorts (RRR): Is Its Valuation Attractive After Dividend Hike and Robust Q3 Earnings?

Red Rock Resorts (RRR) just announced third-quarter earnings that beat last year's results, along with an increased quarterly dividend and a larger, extended share repurchase program. These moves highlight management’s confidence in continued growth.

See our latest analysis for Red Rock Resorts.

Red Rock Resorts’ robust third-quarter results, along with big moves like raising its dividend and expanding buybacks, have kept the spotlight on its growth story even as the 1-year total shareholder return sits at 8.8%. The share price has cooled off this past month, but momentum is still strong over the long run. Five-year total returns above 200% reveal how much value the stock has created for patient investors.

If you want to look beyond casino operators and see what’s catching the market’s eye lately, now’s the perfect moment to broaden your search and discover fast growing stocks with high insider ownership

With the stock trading at a discount to analyst targets, and with solid growth in both earnings and dividends, investors now face a key question: Is this the moment to buy in, or is the growth story already priced in?

Most Popular Narrative: 16.8% Undervalued

Closing at $53.31, Red Rock Resorts stands notably below the most popular narrative’s fair value of $64.08 per share. With this gap in mind, let’s take a look at a catalyst from the widely followed narrative fueling that higher valuation.

“The company’s large land bank and disciplined approach to new development projects in high-barrier-to-entry locations uniquely position Red Rock Resorts to capitalize on the growing preference for local, integrated resort experiences, providing a multi-year pipeline for revenue and EBITDA expansion.”

Read the complete narrative.

Want a closer look at the numbers and big bets that drive this narrative? There is one financial projection, a profit margin leap, and a valuation multiple usually reserved for market darlings. See which bold assumptions make up the DNA of this fair value.

Result: Fair Value of $64.08 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, flat visitation trends and heavy spending on new projects could quickly dampen optimism if consumer demand or execution falters in the coming quarters.

Find out about the key risks to this Red Rock Resorts narrative.

Build Your Own Red Rock Resorts Narrative

If you want a different angle or prefer hands-on analysis, you can dive into the data and shape your own narrative in just a few minutes. Do it your way

A great starting point for your Red Rock Resorts research is our analysis highlighting 5 key rewards and 3 important warning signs that could impact your investment decision.

Looking for More Winning Stock Ideas?

Smart investors never settle for just one great opportunity. Give yourself the edge by uncovering dynamic investment themes that could power your next move.

• Target real profits and growth as you scan these 3586 penny stocks with strong financials, which stand out for their strong fundamentals, not just low prices.
• Supercharge your portfolio and ride the AI wave by tapping into these 27 AI penny stocks, offering some of the biggest potential for future breakthroughs.
• Boost your returns with steady income from these 20 dividend stocks with yields > 3%, which post yields above 3% and have strong track records of rewarding shareholders.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com