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Red Rock Resorts (RRR) Down 1.6% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Red Rock Resorts (RRR - Free Report) . Shares have lost about 1.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Red Rock Resorts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Red Rock Resorts Q2 Earnings & Revenues Top Estimates

Red Rock Resorts reported second-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top line increased year over year, while the bottom line declined from the prior-year quarter’s figure.

The company reported a robust second quarter, with Las Vegas operations achieving record-high net revenues and adjusted EBITDA. Also, it reported solid performance concerning Durango Casino Resort, enhancing operational performance and driving increased play. The company emphasizes its core strategy of reinvesting in existing properties to provide fresh amenities and top-tier customer service and drive growth.

Earnings & Revenues

In the quarter under review, adjusted earnings per share (EPS) came in at 59 cents, outpacing the Zacks Consensus Estimate of 43 cents. In the prior-year quarter, it recorded an adjusted EPS of 65 cents.

Quarterly revenues of $486.4 million surpassed the consensus mark of $474 million by 2.6%. The top line rose 16.9% on a year-over-year basis. The upside was backed by strong visitation and carded slot play in regional and national segments. Also, strong spending per visit added to the positives.

Las Vegas Operations

During second-quarter 2024, revenues from Las Vegas operations totaled $483.2 million, up 17.1% from $412.6 million reported in the prior-year quarter. Adjusted EBITDA was $223.1 million, up 15.6% year over year.

Operating Highlights

During the second quarter, selling, general and administrative expenses came in at $111.3 million compared with $93.5 million reported in the prior-year quarter.

Net income during the quarter came in at $69.8 million compared with $74.9 million reported in the prior-year quarter.

Adjusted EBITDA in the second quarter came in at $201.7 million compared with $175.3 million reported in the prior-year quarter.

Other Financial Details

As of Jun 30, 2024, Red Rock Resorts had cash and cash equivalents of $136.4 million compared with $129.7 million as of Mar 31, 2024. Outstanding debt at the second-quarter end was $3.5 billion, flat sequentially.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -11.72% due to these changes.

VGM Scores

Currently, Red Rock Resorts has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Red Rock Resorts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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