Red Rock Resorts, Inc. Class A Common Stock
RRR
$54.43
+0.65%
Red Rock Resorts, Inc. is a gaming, development, and management company that develops and operates casino and entertainment properties strategically located throughout the Las Vegas valley. The company is a prominent regional player in the Gaming, Resorts & Casinos industry, operating a portfolio of properties that provide a wide variety of entertainment, dining, and lodging options. The current investor narrative centers on the company's ability to navigate the post-pandemic normalization of Las Vegas visitation and spending, with recent financial results showing modest revenue growth but also highlighting the cyclical nature of the business and its sensitivity to broader economic conditions.…
RRR
Red Rock Resorts, Inc. Class A Common Stock
$54.43
RRR 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Red Rock Resorts, Inc. Class A Common Stock's 12-month outlook, with a consensus price target around $70.76 and implied upside of +30.0% versus the current price.
Average Target
$70.76
6 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
6
covering this stock
Price Range
$44 - $71
Analyst target range
The stock is covered by 6 analysts, with recent institutional ratings showing a mix of Buy, Overweight, and Hold recommendations from firms including Citigroup, Barclays, and Wells Fargo, indicating a generally bullish to neutral consensus sentiment. The average analyst EPS estimate is $3.23, with a range from $2.91 to $3.50, and the average revenue estimate is $2.28 billion, with a range from $2.22 billion to $2.34 billion; the relatively tight range in both EPS and revenue estimates suggests analysts have a fairly cohesive view on the company's near-term financial trajectory, though the lack of explicit price targets in the provided data prevents a calculation of implied upside or downside from the current price.
Bulls vs Bears: RRR Investment Factors
The evidence currently tilts bearish, primarily due to the stock's severe technical breakdown, high volatility, and plateauing fundamentals amidst a negative market sentiment shift. The bull case rests on attractive valuation, strong cash flow, and analyst growth expectations, but these are being overshadowed by momentum and cyclical concerns. The single most important tension in the investment debate is whether the current valuation (forward P/E 16.52x) adequately discounts the risk of an earnings slowdown in a potentially weakening economic environment for discretionary spending. If growth persists as analysts forecast, the stock is deeply undervalued; if margins compress further and revenue stagnates, the current price may still be too high.
Bullish
- Strong Free Cash Flow Generation: The company generates substantial free cash flow, with TTM FCF of $609.5 million. This strong cash generation provides financial flexibility for shareholder returns, debt reduction, or reinvestment, and is reflected in a robust Return on Equity of 90.27%.
- Attractive Valuation Multiples: The stock trades at a forward P/E of 16.52x, below its trailing P/E of 19.42x, implying expected earnings growth. Its EV/EBITDA of 4.45x and P/S of 1.82x appear reasonable for a cash-generative casino operator, suggesting it is not overvalued on an absolute basis.
- Analyst Consensus on Earnings Growth: Analysts project average EPS of $3.23 for the coming period, representing significant growth from recent quarterly EPS figures. The tight range of estimates ($2.91 to $3.50) indicates a cohesive and confident view on the company's near-term profit trajectory.
- Modest Revenue Growth and Profitability: Q4 2025 revenue grew 3.24% YoY to $511.8 million, and the company maintains profitability with a net margin of 8.73%. Despite quarterly fluctuations, the business demonstrates a baseline of stable, profitable operations in its core Las Vegas market.
Bearish
- Severe Negative Momentum and Technical Downtrend: The stock is down 11.73% over 3 months and 7.95% over 1 month, significantly underperforming the market (relative strength of -15.32 and -16.65, respectively). Trading near 20% of its 52-week range ($41.56-$68.99) signals persistent selling pressure and broken investor confidence.
- High Volatility and Economic Sensitivity: With a beta of 1.476, RRR is approximately 48% more volatile than the market, amplifying downside risk during downturns. As a consumer discretionary casino stock, it is highly sensitive to economic cycles and potential pullbacks in Las Vegas tourism spending.
- Inconsistent Quarterly Profitability and Margin Compression: Net income has fluctuated from $56.4M in Q2 2025 to $42.3M in Q3 2025, and gross margin compressed from 63.10% in Q2 to 51.55% in Q4 2025. This volatility and margin pressure raise concerns about the stability and quality of earnings.
- Revenue Plateau and Lack of Acceleration: Quarterly revenue has plateaued in the $475M-$526M range over the last year, with only 3.24% YoY growth in Q4. This suggests the post-pandemic recovery phase may be over, with the business struggling to find new growth catalysts beyond cyclical normalization.
RRR Technical Analysis
The stock is in a pronounced downtrend, having declined 11.73% over the past three months and 7.95% over the past month, which contrasts sharply with its positive 29.29% gain over the past year. Currently trading at $54.08, the stock is positioned at approximately 20% of its 52-week range ($41.56 to $68.99), indicating it is much closer to its annual lows than its highs, which may signal a potential value opportunity but also reflects significant recent selling pressure and negative momentum. Recent momentum is decisively negative, with the 1-month decline of 7.95% and 3-month decline of 11.73% both significantly underperforming the broader market, as evidenced by a relative strength of -16.65 over one month and -15.32 over three months, suggesting the stock is experiencing a sharp reversal from its longer-term uptrend. Key technical support is at the 52-week low of $41.56, while resistance is at the 52-week high of $68.99; a breakdown below the $41.56 support level would signal a continuation of the bearish trend, while a recovery above recent highs near $66 would be needed to reverse the negative momentum. The stock exhibits high volatility with a beta of 1.476, meaning it is approximately 48% more volatile than the broader market, which is a critical factor for risk management given its current downtrend and exposure to the cyclical consumer discretionary sector.
Beta
1.48
1.48x market volatility
Max Drawdown
-21.9%
Largest decline past year
52-Week Range
$42-$69
Price range past year
Annual Return
+27.8%
Cumulative gain past year
| Period | RRR Return | S&P 500 |
|---|---|---|
| 1m | +1.0% | +12.8% |
| 3m | -9.9% | +2.8% |
| 6m | +4.1% | +4.0% |
| 1y | +27.8% | +29.9% |
| ytd | -13.6% | +4.9% |
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RRR Fundamental Analysis
Revenue growth has been modest but positive, with Q4 2025 revenue of $511.78 million representing a 3.24% year-over-year increase; however, examining the quarterly sequence from Q1 2025 ($497.86M) to Q4 2025 ($511.78M) shows revenue has been relatively stable in the $475M to $526M range, indicating a plateau rather than accelerating growth, with the Casino segment being the dominant revenue driver at $343.0 million in the latest period. The company is profitable, reporting Q4 2025 net income of $44.66 million and a net margin of 8.73%, while gross margin for the quarter was 51.55%; profitability has been inconsistent quarter-to-quarter, with net income fluctuating from a high of $56.40 million in Q2 2025 to $42.25 million in Q3 2025, and gross margin compressing from 63.10% in Q2 2025 to 51.55% in Q4 2025, suggesting potential cost pressures or revenue mix shifts. The balance sheet shows moderate leverage with a debt-to-equity ratio of 0.28, and the company generates substantial cash flow, with trailing twelve-month free cash flow of $609.51 million and a current ratio of 0.79; the strong free cash flow, coupled with a return on equity of 90.27%, indicates efficient use of equity capital, though the sub-1.0 current ratio points to potential short-term liquidity constraints relative to current obligations.
Quarterly Revenue
$511777000.0B
2025-12
Revenue YoY Growth
+0.03%
YoY Comparison
Gross Margin
+0.51%
Latest Quarter
Free Cash Flow
$609513000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is RRR Overvalued?
Given the company's positive net income, the primary valuation metric is the Price-to-Earnings (PE) ratio. The trailing PE ratio is 19.42x, while the forward PE is 16.52x, with the lower forward multiple suggesting the market anticipates earnings growth, aligning with analyst EPS estimates averaging $3.23 for the coming period. Compared to sector averages, the stock's trailing PE of 19.42x and forward PE of 16.52x are not directly comparable without a provided industry average, but its Price-to-Sales ratio of 1.82x and EV/EBITDA of 4.45x appear reasonable for a cash-generative regional casino operator, though the high Price-to-Book ratio of 17.53x reflects significant intangible asset value and the capital-intensive nature of the business. Historically, the stock's current trailing PE of 19.42x is below its own recent historical range observed in the data, which has seen quarterly PE ratios fluctuate from as low as 6.27x in late 2022 to over 28x in 2024; trading near the midpoint of its own historical band suggests the market is not pricing in extreme optimism or pessimism relative to the company's recent past.
PE
19.4x
Latest Quarter
vs. Historical
High-End
5-Year PE Range -9x~32x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
4.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: The primary financial risk is earnings volatility, as evidenced by quarterly net income swinging from $56.4M to $42.3M and gross margin compressing over 11 percentage points in recent quarters. This inconsistency makes future earnings difficult to predict. Furthermore, revenue growth has plateaued around 3% YoY, indicating dependence on a stable Las Vegas economy rather than organic expansion. The sub-1.0 current ratio (0.79) points to a potential short-term liquidity constraint, though it is buffered by substantial annual free cash flow generation of over $600 million.
Market & Competitive Risks: The stock carries significant valuation compression risk if its cyclical nature is repriced by the market; trading at a forward P/E of 16.52x, it is not excessively valued, but a downturn could see multiples contract toward historical lows near 6x. Its high beta of 1.476 means it will likely fall more than the market in a broad sell-off, as seen in its recent severe underperformance. Competitive and regulatory risks are inherent to the concentrated Las Vegas gaming market, where any shift in consumer preferences or increased regulatory burdens could directly impact the dominant Casino segment, which drove $343.0M of Q4 revenue.
Worst-Case Scenario: The worst-case scenario involves a sharp economic contraction leading to a significant drop in Las Vegas visitation and per-capita gaming spend. This would trigger simultaneous revenue decline, margin compression, and multiple contraction. In this adverse scenario, the stock could realistically revisit its 52-week low of $41.56, representing a downside of approximately -23% from the current price of $54.08. A reversion to the lower end of its historical P/E range could amplify losses further, potentially matching the stock's recent maximum drawdown of -21.86%.