Red Rock Resorts (NasdaqGS:RRR) - Share price, News & Analysis

RRR fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	2/6
Past Performance	3/6
Financial Health	3/6
Dividends	3/6

RRR Stock Overview

Red Rock Resorts, Inc., through its interest in Station Holdco and Station LLC, develops and operates casino and entertainment properties in the United States.

Rewards

Trading at 30.6% below our estimate of its fair value

Earnings are forecast to grow 11.64% per year

Became profitable this year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Red Rock Resorts Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Red Rock Resorts
Historical stock prices
Current Share Price	US$35.36
52 Week High	US$58.74
52 Week Low	US$31.68
Beta	2.34
1 Month Change	-1.17%
3 Month Change	-26.10%
1 Year Change	-19.44%
3 Year Change	64.62%
5 Year Change	50.15%
Change since IPO	89.09%

Recent News & Updates

May 30

Why We Like The Returns At Red Rock Resorts (NASDAQ:RRR)

If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for...

Shareholder Returns

	RRR	US Hospitality	US Market
7D	7.0%	4.6%	6.6%
1Y	-19.4%	-30.1%	-18.5%

Return vs Industry: RRR exceeded the US Hospitality industry which returned -34.1% over the past year.

Return vs Market: RRR exceeded the US Market which returned -20.5% over the past year.

Price Volatility

Is RRR's price volatile compared to industry and market?
RRR volatility
RRR Average Weekly Movement	7.8%
Hospitality Industry Average Movement	9.2%
Market Average Movement	8.0%
10% most volatile stocks in US Market	16.6%
10% least volatile stocks in US Market	3.1%

Stable Share Price: RRR is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: RRR's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1976	7,800	Frank Fertitta	https://www.redrockresorts.com

Red 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.

Red Rock Resorts Fundamentals Summary

How do Red Rock Resorts's earnings and revenue compare to its market cap?
RRR fundamental statistics
Market Cap	US$3.66b
Earnings (TTM)	US$354.97m
Revenue (TTM)	US$1.67b

6.1x

P/E Ratio

1.3x

P/S Ratio

Is RRR overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RRR income statement (TTM)
Revenue	US$1.67b
Cost of Revenue	US$575.20m
Gross Profit	US$1.09b
Other Expenses	US$736.75m
Earnings	US$354.97m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	5.82
Gross Margin	65.49%
Net Profit Margin	21.30%
Debt/Equity Ratio	2,943.4%

How did RRR perform over the long term?

See historical performance and comparison

Dividends

2.8%

Current Dividend Yield

5%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is RRR undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RRR?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for RRR. This is calculated by dividing RRR's market cap by their current preferred multiple.
What is RRR's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$3.66b

RRR key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.8x
Enterprise Value/EBITDA	6.3x
PEG Ratio	0.5x

Price to Earnings Ratio vs Peers

How does RRR's PE Ratio compare to its peers?

RRR PE Ratio vs Peers

The above table shows the PE ratio for RRR vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	91.3x

Forward PE

Price-To-Earnings vs Peers: RRR is good value based on its Price-To-Earnings Ratio (6.1x) compared to the peer average (91.3x).

Price to Earnings Ratio vs Industry

How does RRR's PE Ratio compare vs other companies in the U.S. Hospitality Industry?

Price-To-Earnings vs Industry: RRR is good value based on its Price-To-Earnings Ratio (6.1x) compared to the US Hospitality industry average (17.3x)

Price to Earnings Ratio vs Fair Ratio

What is RRR's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RRR PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	6.1x
Fair PE Ratio	23.9x

Price-To-Earnings vs Fair Ratio: RRR is good value based on its Price-To-Earnings Ratio (6.1x) compared to the estimated Fair Price-To-Earnings Ratio (23.9x).

Share Price vs Fair Value

What is the Fair Price of RRR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RRR ($35.36) is trading below our estimate of fair value ($50.98)

Significantly Below Fair Value: RRR is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: RRR is good value based on its PEG Ratio (0.5x)

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Future Growth

How is Red Rock Resorts forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

11.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: RRR's forecast earnings growth (11.6% per year) is above the savings rate (1.9%).

Earnings vs Market: RRR's earnings (11.6% per year) are forecast to grow slower than the US market (13.9% per year).

High Growth Earnings: RRR's earnings are forecast to grow, but not significantly.

Revenue vs Market: RRR's revenue (4.6% per year) is forecast to grow slower than the US market (8.3% per year).

High Growth Revenue: RRR's revenue (4.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: RRR's Return on Equity is forecast to be very high in 3 years time (80%).

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Past Performance

How has Red Rock Resorts performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

2.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RRR has high quality earnings.

Growing Profit Margin: RRR became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: RRR's earnings have grown by 2.7% per year over the past 5 years.

Accelerating Growth: RRR has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: RRR has become profitable in the last year, making it difficult to compare its past year earnings growth to the Hospitality industry (119.6%).

Return on Equity

High ROE: Whilst RRR's Return on Equity (572.04%) is outstanding, this metric is skewed due to their high level of debt.

Discover strong past performing companies

Financial Health

How is Red Rock Resorts's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: RRR's short term assets ($470.0M) exceed its short term liabilities ($236.8M).

Long Term Liabilities: RRR's short term assets ($470.0M) do not cover its long term liabilities ($2.9B).

Debt to Equity History and Analysis

Debt Level: RRR's net debt to equity ratio (2595.6%) is considered high.

Reducing Debt: RRR's debt to equity ratio has increased from 357.8% to 2943.4% over the past 5 years.

Debt Coverage: RRR's debt is well covered by operating cash flow (22.7%).

Interest Coverage: RRR's interest payments on its debt are well covered by EBIT (5.8x coverage).

Balance Sheet

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Dividend

What is Red Rock Resorts's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.83%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: RRR's dividend (2.83%) is higher than the bottom 25% of dividend payers in the US market (1.62%).

High Dividend: RRR's dividend (2.83%) is low compared to the top 25% of dividend payers in the US market (4.34%).

Stability and Growth of Payments

Stable Dividend: RRR has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: RRR's dividend payments have increased, but the company has only paid a dividend for 6 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (4.7%), RRR's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (19.7%), RRR's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

5.0yrs

Average management tenure

CEO

Frank Fertitta (59 yo)

6.67yrs

Tenure

US$3,150,788

Compensation

Mr. Frank J. Fertitta, III, has been Chief Executive Officer and Manager of Station Casinos LLC since January 2011 and June 2011 respectively. Mr. Fertitta has been Chief Executive Officer at Fertitta Ente...

CEO Compensation Analysis

Compensation vs Market: Frank's total compensation ($USD3.15M) is below average for companies of similar size in the US market ($USD6.92M).

Compensation vs Earnings: Frank's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: RRR's management team is seasoned and experienced (5 years average tenure).

Board Members

Experienced Board: RRR's board of directors are considered experienced (6.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/24 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31