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.

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Red Rock Resorts stock research in summary

redrockresorts.com

ANALYSIS: With an Obermatt Combined Rank of 68 (better than 68% compared with investment alternatives), Red Rock Resorts (Casinos & Gaming, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Red Rock Resorts are low in value (priced high) with a consolidated Value Rank of 35 (worse than 65% of alternatives). But they show above-average growth (Growth Rank of 65) and are safely financed (Safety Rank of 61, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 68, is a buy recommendation based on Red Rock Resorts's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Red Rock Resorts exhibits low value (Obermatt Value Rank of 35), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 65). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 61) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). 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	35
Growth Rank	65
Safety Rank	61
Combined Rank	68

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

14-Nov-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	35
GROWTH
GROWTH	97	51	33	65
SAFETY
SAFETY	44	63	52	61
SENTIMENT
SENTIMENT	n/a	30	54	^new
360° VIEW
360° VIEW	n/a	56	37	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-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	35
GROWTH
GROWTH	97	51	33	65
SAFETY
SAFETY	44	63	52	61
COMBINED
COMBINED	75	73	24	68

Last update of combined financial performance: 14-Nov-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 35 (worse than 65% 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 80% 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 22 which means that the stock price compared with what market professionals expect for future profits is higher than 78% 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 35, 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	22
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	80
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	48	67	26	35

Last update of Value Rank: 14-Nov-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 65 (better than 65% compared with alternatives), Red Rock Resorts shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Red Rock Resorts. Capital Growth has a rank of 91, which means that currently professionals expect the company to grow its invested capital more than 38% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 75 (above 75% of alternative investments). But Sales Growth has only a rank of 20, which means that, currently, professionals expect the company to grow less than 80% of its competitors, and Profit Growth is also low at a rank of 38. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Red Rock Resorts, investors may want to look at value and sentiment indicators for a well-rounded picture of this 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 mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	45	7	80	20
PROFIT GROWTH
PROFIT GROWTH	28	78	25	38
CAPITAL GROWTH
CAPITAL GROWTH	n/a	40	4	91
STOCK RETURNS
STOCK RETURNS	96	87	69	75
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	97	51	33	65

Last update of Growth Rank: 14-Nov-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 61 (better than 61% 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 70, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 70% 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 27, which means the company has an above-average debt-to-equity ratio. It has more debt than 73% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 61 (better than 61% 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	27
REFINANCING
REFINANCING	95	67	56	70
LIQUIDITY
LIQUIDITY	55	70	72	60
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	44	63	52	61

Last update of Safety Rank: 14-Nov-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: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Red Rock Resorts.
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