NasdaqGS:RRR

Stock Analysis Report

Executive Summary

Red Rock Resorts, Inc., through its interest in Station Holdco and Station LLC, engages in casino entertainment, and gaming and entertainment businesses in the United States.

Rewards

Earnings are forecast to grow 71.29% per year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 1.73% is not well covered by earnings

Large one-off items impacting financial results

Profit margins (0.04%) are lower than last year (10.8%)



Snowflake Analysis

Moderate growth potential unattractive dividend payer.


Similar Companies

MGM Resorts International

NYSE:MGM

Share Price & News

How has Red Rock Resorts's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RRR has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.2%

RRR

-3.2%

US Hospitality

-0.09%

US Market


1 Year Return

-1.5%

RRR

15.0%

US Hospitality

23.9%

US Market

Return vs Industry: RRR underperformed the US Hospitality industry which returned 20.1% over the past year.

Return vs Market: RRR underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

RRRIndustryMarket
7 Day2.2%-3.2%-0.09%
30 Day3.4%0.3%3.1%
90 Day12.9%9.9%10.4%
1 Year0.2%-1.5%18.0%15.0%26.6%23.9%
3 Year8.6%3.5%38.6%29.3%50.9%41.2%
5 Yearn/a52.7%36.5%78.1%58.5%

Price Volatility Vs. Market

How volatile is Red Rock Resorts's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Red Rock Resorts undervalued compared to its fair value and its price relative to the market?

2223.63x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: RRR ($23.09) is trading above our estimate of fair value ($21.04)

Significantly Below Fair Value: RRR is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: RRR is poor value based on its PE Ratio (2094x) compared to the Hospitality industry average (25.1x).

PE vs Market: RRR is poor value based on its PE Ratio (2094x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: RRR is poor value based on its PEG Ratio (29.4x)


Price to Book Ratio

PB vs Industry: RRR is overvalued based on its PB Ratio (3.2x) compared to the US Hospitality industry average (2.4x).


Next Steps

Future Growth

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

54.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RRR's forecast earnings growth (71.3% per year) is above the savings rate (1.7%).

Earnings vs Market: RRR's earnings (71.3% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: RRR's revenue (1.8% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: RRR's revenue (1.8% 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 low in 3 years time (12.8%).


Next Steps

Past Performance

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

18.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RRR has a large one-off loss of $80.6M impacting its September 30 2019 financial results.

Growing Profit Margin: RRR's current net profit margins (0.04%) are lower than last year (10.8%).


Past Earnings Growth Analysis

Earnings Trend: RRR's earnings have grown by 18.7% per year over the past 5 years.

Accelerating Growth: RRR's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: RRR had negative earnings growth (-99.6%) over the past year, making it difficult to compare to the Hospitality industry average (-18.9%).


Return on Equity

High ROE: RRR's Return on Equity (-0.05%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Red Rock Resorts's financial position?


Financial Position Analysis

Short Term Liabilities: RRR's short term assets ($260.0M) do not cover its short term liabilities ($270.1M).

Long Term Liabilities: RRR's short term assets ($260.0M) do not cover its long term liabilities ($3.1B).


Debt to Equity History and Analysis

Debt Level: RRR's debt to equity ratio (390.6%) is considered high.

Reducing Debt: RRR's debt to equity ratio has increased from 331.4% to 390.6% over the past 5 years.

Debt Coverage: RRR's debt is not well covered by operating cash flow (9.9%).

Interest Coverage: RRR's interest payments on its debt are not well covered by EBIT (1.3x coverage).


Balance Sheet

Inventory Level: RRR has a high level of physical assets or inventory.

Debt Coverage by Assets: RRR's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

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

1.63%

Current Dividend Yield


Dividend Yield vs Market

company1.6%marketbottom25%1.4%markettop25%3.7%industryaverage2.9%forecastin3Years1.7%

Current dividend yield vs market & industry

Notable Dividend: RRR's dividend (1.73%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: RRR's dividend (1.73%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, RRR has been paying a dividend for less than 10 years.

Growing Dividend: RRR has only been paying a dividend for 3 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (3627.5%), RRR's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RRR's dividends in 3 years are forecast to be well covered by earnings (42% payout ratio).


Next Steps

Management

What is the CEO of Red Rock Resorts's salary, the management and board of directors tenure and is there insider trading?

2.7yrs

Average management tenure


CEO

Frank Fertitta (57yo)

4.3yrs

Tenure

US$1,957,906

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 of Fertitta Ente ...


CEO Compensation Analysis

Compensation vs Market: Frank's total compensation ($USD1.96M) is below average for companies of similar size in the US market ($USD4.99M).

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


Management Age and Tenure

2.7yrs

Average Tenure

57yo

Average Age

Experienced Management: RRR's management team is considered experienced (2.7 years average tenure).


Board Age and Tenure

4.3yrs

Average Tenure

57yo

Average Age

Experienced Board: RRR's board of directors are considered experienced (4.3 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$8,569,27627 Aug 19
Frank Fertitta
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares444,119
Max PriceUS$19.30
BuyUS$2,142,32427 Aug 19
Lorenzo Fertitta
EntityIndividual
Role
Vice Chairman
Vice Chairman of the Board
Shares111,030
Max PriceUS$19.30
BuyUS$196,00023 Aug 19
Frank Fertitta
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares10,000
Max PriceUS$19.60
BuyUS$49,00023 Aug 19
Lorenzo Fertitta
EntityIndividual
Role
Vice Chairman
Vice Chairman of the Board
Shares2,500
Max PriceUS$19.60
BuyUS$487,25120 Aug 19
Lorenzo Fertitta
EntityIndividual
Role
Vice Chairman
Vice Chairman of the Board
Shares26,330
Max PriceUS$19.58
BuyUS$1,949,00420 Aug 19
Frank Fertitta
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares105,320
Max PriceUS$19.58
BuyUS$20,987,95819 Aug 19
Lorenzo Fertitta
EntityIndividual
Role
Vice Chairman
Vice Chairman of the Board
Shares1,124,017
Max PriceUS$18.97
BuyUS$20,998,18619 Aug 19
Frank Fertitta
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares1,124,350
Max PriceUS$18.97
BuyUS$3,484,40416 Aug 19
Lorenzo Fertitta
EntityIndividual
Role
Vice Chairman
Vice Chairman of the Board
Shares186,800
Max PriceUS$18.84
BuyUS$871,10116 Aug 19
Frank Fertitta
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares46,700
Max PriceUS$18.84
BuyUS$2,844,41712 Aug 19
Frank Fertitta
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares152,000
Max PriceUS$18.97
BuyUS$11,377,67012 Aug 19
Lorenzo Fertitta
EntityIndividual
Role
Vice Chairman
Vice Chairman of the Board
Shares608,000
Max PriceUS$18.97
BuyUS$14,222,08712 Aug 19
Frank Fertitta
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares760,000
Max PriceUS$18.97
BuyUS$14,199,70112 Aug 19
Lorenzo Fertitta
EntityIndividual
Role
Vice Chairman
Vice Chairman of the Board
Shares760,000
Max PriceUS$18.97
SellUS$835,58407 Mar 19
Joseph Hasson
EntityIndividual
Role
Consultant
Consultant
Shares31,628
Max PriceUS$26.67
SellUS$1,159,72406 Mar 19
Joseph Hasson
EntityIndividual
Role
Consultant
Consultant
Shares42,293
Max PriceUS$27.86

Ownership Breakdown

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


Management Team

  • Frank Fertitta (57yo)

    Chairman & CEO

    • Tenure: 4.3yrs
    • Compensation: US$1.96m
  • Richard Haskins (55yo)

    President

    • Tenure: 4.3yrs
    • Compensation: US$6.50m
  • Steve Cootey (50yo)

    Executive VP

    • Tenure: 2.7yrs
    • Compensation: US$3.08m
  • Joe Hasson (63yo)

    Consultant

    • Tenure: 0.9yrs
    • Compensation: US$3.01m
  • Dan Foley

    Vice President of Finance & Investor Relations

    • Marc Falcone (46yo)

      Consultant

      • Tenure: 2.7yrs
      • Compensation: US$1.94m
    • Daniel Roy (59yo)

      Consultant

      • Tenure: 2.7yrs
      • Compensation: US$1.82m
    • Jeffrey Welch (57yo)

      Executive VP & Chief Legal Officer

      • Tenure: 2.6yrs
      • Compensation: US$3.03m
    • Robert Finch (59yo)

      Executive VP & COO

      • Tenure: 0.9yrs

    Board Members

    • Frank Fertitta (57yo)

      Chairman & CEO

      • Tenure: 4.3yrs
      • Compensation: US$1.96m
    • Lorenzo Fertitta (50yo)

      Vice Chairman of the Board

      • Tenure: 3yrs
      • Compensation: US$125.00k
    • James Nave (75yo)

      Lead Independent Director

      • Tenure: 4.3yrs
      • Compensation: US$335.02k
    • Bob Lewis (73yo)

      Independent Director

      • Tenure: 4.3yrs
      • Compensation: US$305.02k
    • Rob Cashell (53yo)

      Independent Director

      • Tenure: 4.3yrs
      • Compensation: US$302.52k

    Company Information

    Red Rock Resorts, Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Red Rock Resorts, Inc.
    • Ticker: RRR
    • Exchange: NasdaqGS
    • Founded: 1976
    • Industry: Casinos and Gaming
    • Sector: Consumer Services
    • Implied Market Cap: US$2.707b
    • Market Cap: US$1.708b
    • Shares outstanding: 116.47m
    • Website: https://www.redrockresorts.com

    Number of Employees


    Location

    • Red Rock Resorts, Inc.
    • 1505 South Pavilion Center Drive
    • Las Vegas
    • Nevada
    • 89135
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    RRRNasdaqGS (Nasdaq Global Select)YesClass A Common StockUSUSDApr 2016
    RRKDB (Deutsche Boerse AG)YesClass A Common StockDEEURApr 2016

    Biography

    Red Rock Resorts, Inc., through its interest in Station Holdco and Station LLC, engages in casino entertainment, and gaming and entertainment businesses in the United States. It operates through two segments, Las Vegas operations and Native American management. The company develops, manages, and operates casino entertainment properties; and owns and operates 10 gaming and entertainment facilities, and 10 smaller casinos in the Las Vegas regional market. In addition, it manages Graton Resort in Sonoma County, California; and Gun Lake in Allegan County, Michigan. It operates approximately 20,000 slot machines, 360 table games, and 5,000 hotel rooms. 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 founded in 1976 and is based in Las Vegas, Nevada. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/24 01:26
    End of Day Share Price2020/01/23 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.