Fact based stock research
Red Rock Resorts (NasdaqGS:RRR)

US75700L1089

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

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Red Rock Resorts stock research in summary

redrockresorts.com

ANALYSIS: With an Obermatt Combined Rank of 22 (worse than 78% compared with investment alternatives), Red Rock Resorts (Casinos & Gaming, USA) shares have lower financial characteristics compared with similar stocks. Shares of Red Rock Resorts are low in value (priced high) with a consolidated Value Rank of 29 (worse than 71% of alternatives) and show below-average growth (Growth Rank of 37) but are safely financed (Safety Rank of 55), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 22, is a sell recommendation based on Red Rock Resorts's financial characteristics. As the company Red Rock Resorts's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 29) and low growth (Obermatt Growth Rank of 37), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 55) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	29
Growth Rank	37
Safety Rank	55
Combined Rank	22

Country	USA
Industry	Casinos & Gaming
Index	Dividends USA, NASDAQ
Size class	Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Red Rock Resorts

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	48	67	26	29
GROWTH
GROWTH	97	51	33	37
SAFETY
SAFETY	44	63	52	55
SENTIMENT
SENTIMENT	n/a	30	54	^new
360° VIEW
360° VIEW	n/a	56	37	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Red Rock Resorts is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	48	67	26	29
GROWTH
GROWTH	97	51	33	37
SAFETY
SAFETY	44	63	52	55
COMBINED
COMBINED	75	73	24	22

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Red Rock Resorts the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 29 (worse than 71% compared with alternatives), Red Rock Resorts shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Red Rock Resorts. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 83% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 24 which means that the stock price compared with what market professionals expect for future profits is higher than 76% of comparable companies, indicating a low value concerning Red Rock Resorts's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 40 which means that the stock price compared with what market professionals expect for future profit levels is higher than 60% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 6 is also low. Compared with invested capital, the stock price is higher than for 94% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 29, is a hold recommendation based on Red Rock Resorts's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Red Rock Resorts? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Red Rock Resorts only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	67	21	19	24
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	67	55	35	40
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	9	29	3	6
DIVIDEND YIELD
DIVIDEND YIELD	1	91	88	83
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	48	67	26	29

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Red Rock Resorts; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), Red Rock Resorts shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Red Rock Resorts. Only Capital Growth has a good rank of 90, which means that currently professionals expect the company to grow its invested capital more than 38% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 14 which means that currently professionals expect the company to grow less than 86% of its competitors. Profit Growth with a rank of 38 and Stock Returns with a rank of 47 are also low (below 53% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 37, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Red Rock Resorts is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	45	7	80	14
PROFIT GROWTH
PROFIT GROWTH	28	78	25	38
CAPITAL GROWTH
CAPITAL GROWTH	n/a	40	4	90
STOCK RETURNS
STOCK RETURNS	96	87	69	47
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	97	51	33	37

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Red Rock Resorts.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 55 (better than 55% compared with alternatives), the company Red Rock Resorts has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Red Rock Resorts is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Red Rock Resorts. Refinancing is at 67, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 67% of its competitors. Liquidity is also good at 60, meaning the company generates more profit to service its debt than 60% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 26, which means the company has an above-average debt-to-equity ratio. It has more debt than 74% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 55 (better than 55% compared with alternatives), Red Rock Resorts has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Red Rock Resorts could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Red Rock Resorts and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	9	30	24	26
REFINANCING
REFINANCING	95	67	56	67
LIQUIDITY
LIQUIDITY	55	70	72	60
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	44	63	52	55

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Red Rock Resorts and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	19	37	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	70	70	^new
MARKET PULSE
MARKET PULSE	n/a	30	43	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	30	54	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Red Rock Resorts.
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