Latest news with #RedRockResorts'
Yahoo
3 days ago
- Business
- Yahoo
Those who invested in Red Rock Resorts (NASDAQ:RRR) five years ago are up 273%
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on a lighter note, a good company can see its share price rise well over 100%. For instance, the price of Red Rock Resorts, Inc. (NASDAQ:RRR) stock is up an impressive 208% over the last five years. In more good news, the share price has risen 9.7% in thirty days. But this could be related to good market conditions -- stocks in its market are up 4.1% in the last month. So let's assess the underlying fundamentals over the last 5 years and see if they've moved in lock-step with shareholder returns. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS). During the last half decade, Red Rock Resorts became profitable. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here. You can see how EPS has changed over time in the image below (click on the chart to see the exact values). We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free interactive report on Red Rock Resorts' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further. It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Red Rock Resorts, it has a TSR of 273% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments! Investors in Red Rock Resorts had a tough year, with a total loss of 2.3% (including dividends), against a market gain of about 13%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 30%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Red Rock Resorts better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Red Rock Resorts you should be aware of, and 1 of them is a bit concerning. If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: most of them are flying under the radar). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
15-05-2025
- Business
- Yahoo
RRR Q1 Earnings Call: Durango Ramp and Capital Returns Shape Outlook
Casino resort and entertainment company Red Rock Resorts (NASDAQ:RRR) beat Wall Street's revenue expectations in Q1 CY2025, with sales up 1.8% year on year to $497.9 million. Its non-GAAP profit of $0.51 per share was 12.9% above analysts' consensus estimates. Is now the time to buy RRR? Find out in our full research report (it's free). Revenue: $497.9 million vs analyst estimates of $495.1 million (1.8% year-on-year growth, 0.6% beat) Adjusted EPS: $0.51 vs analyst estimates of $0.45 (12.9% beat) Adjusted EBITDA: $215.1 million vs analyst estimates of $210 million (43.2% margin, 2.4% beat) Operating Margin: 31.1%, in line with the same quarter last year Free Cash Flow Margin: 11.6%, up from 5.8% in the same quarter last year Market Capitalization: $2.8 billion Red Rock Resorts' first quarter results reflected steady momentum in its Las Vegas portfolio, with management attributing the outcome to continued growth at the new Durango Casino & Resort and sustained demand from local customers. CEO Frank Fertitta III highlighted increased visitation and higher customer engagement, particularly among carded players in the Durango area, as key factors supporting the quarter's performance. The company also benefited from disciplined cost control and operational efficiency, including lower utility expenses and stable payroll levels, which contributed to stable operating margins. Looking ahead, management maintained a positive outlook, citing ongoing demographic growth in the Las Vegas Valley and a robust development pipeline. CFO Stephen Cootey emphasized that new projects, renovations at Sunset Station and Green Valley Ranch, and the expansion at Durango are expected to support future growth. However, management also acknowledged potential headwinds, such as construction cost pressures from tariffs and possible short-term disruption from ongoing property upgrades. The leadership team pointed to a balanced approach between reinvestment and capital returns, including a newly declared special dividend, as central to their strategy for the remainder of the year. Red Rock Resorts' management discussed several developments affecting recent performance and future prospects. A notable driver was the successful ramp of Durango, while the broader Las Vegas locals market continued to show resilience and demographic growth. Durango ramp and customer acquisition: Management reported that Durango added over 95,000 new customers to the database within its first year. The property is on pace to become one of the company's highest-margin assets, with return on invested capital net of cannibalization reaching nearly 16%. Revenue backfill at Red Rock: Some cannibalization from Durango's opening impacted the Red Rock property, but management stated that revenue recovery is ahead of historical pace and expects full backfill over the next several years, supported by local population growth. Operational discipline and cost control: Lower utility costs—down over 35% year over year—and stable payroll expenses contributed to margin stability. Management noted that expense management offset typical seasonal visitation patterns this quarter. Expansion and renovation projects: Significant capital is being allocated to expand Durango and renovate Sunset Station and Green Valley Ranch. These projects include adding high-limit gaming spaces, new dining and entertainment venues, and a refreshed hotel and convention space, with management viewing them as key to attracting new demographics and supporting higher returns. Financing and capital returns: The company closed construction financing for the North Fork project, reducing the need for balance sheet funding, and announced a special cash dividend to shareholders. Management described this as part of a long-term strategy to balance reinvestment and shareholder returns. Management's outlook for the remainder of the year is shaped by continued investment in property upgrades, demographic growth in key Las Vegas areas, and a focus on both operational discipline and shareholder returns. Las Vegas Valley expansion: The company expects ongoing population growth, particularly in Summerlin and surrounding communities, to support demand at its core properties and drive revenue backfill at Red Rock. Project completion and disruption risk: Major projects at Durango, Sunset Station, and Green Valley Ranch are expected to boost future profitability, but management acknowledged the likelihood of short-term disruption as renovations intensify through the year. Potential cost headwinds: Management cited tariffs and construction material sourcing challenges as possible risks to project budgets, but expects disciplined procurement and contract contingencies to limit impact to 4–6% of announced project costs. Carlo Santarelli (Deutsche Bank): Asked about margin flow-through and sportsbook performance; management credited stronger sports betting results, stable payroll, and lower utilities for margin gains. John DeCree (CBRE): Inquired about the rationale behind the special dividend and capital allocation; CFO Stephen Cootey linked the dividend to capital returned from the North Fork project and stressed a balanced capital return approach. Shaun Kelley (Bank of America): Questioned the impact of construction cost inflation and tariffs; management said cost impacts should be manageable and are being addressed through sourcing flexibility and contract terms. Barry Jonas (Truist Securities): Asked about the ability to offset rising costs; management stated it is seeking alternative suppliers and does not plan to pass costs to customers unless necessary. David Katz (Jefferies): Explored the company's openness to operating leased properties; management reiterated a preference for ownership but remains open to evaluating leasing opportunities selectively. Looking ahead, the StockStory team will be watching (1) the pace of customer acquisition and revenue ramp at Durango as expansion is completed, (2) the extent of disruption and subsequent recovery at Sunset Station and Green Valley Ranch as renovations progress, and (3) how efficiently Red Rock Resorts manages construction cost pressures and procurement challenges in an inflationary environment. Execution on these initiatives will be key markers for sustained growth and margin stability. Red Rock Resorts currently trades at a forward P/E ratio of 28.8×. At this valuation, is it a buy or sell post earnings? Find out in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. 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