Why Is Red Rock Resorts (RRR) Down 4.1% Since Last Earnings Report?

A month has gone by since the last earnings report for Red Rock Resorts (RRR). Shares have lost about 4.1% in that time frame, outperforming 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 catalysts.

Red Rock Resorts Q2 Earnings & Revenues Top Estimates

Red Rock Resorts reported second-quarter 2022 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Earnings beat the consensus mark for the ninth straight quarter. The top line fell year over year, but the bottom line increased on a year-over-year basis. The company reported a rise in visitation and strong spending per visit across its portfolio.

Earnings & Revenues

In the quarter under review, adjusted earnings per share (EPS) came in at $1.27, which beat the Zacks Consensus Estimate of 52 cents. In the prior-year quarter, the company had reported an adjusted EPS of $1.12.

Quarterly revenues of $422.2 million beat the consensus mark of $402 million. However, the top line declined 1% on a year-over-year basis. Meanwhile, adjusted EBITDA in the quarter was $188.9 million, down 10% year over year.

Segmental Details

Las Vegas Operations: During second-quarter 2022, revenues in the segment totaled $420.1 million compared with $426.4 million reported in the prior-year quarter. The segments' adjusted EBITDA was $203.9 million, down 8% on a year-over-year basis.

Native American Management: During the quarter under discussion, the company did not report any revenues in the Native American Management segment.

Other Financial Details

As of Jun 30, 2022, Red Rock Resorts had cash and cash equivalent of $256.3 million compared with $336.6 million reported in the previous quarter.

Outstanding debt at the end of the second quarter amounted to $2.88 billion compared with $2.89 billion reported in the previous quarter.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

Currently, Red Rock Resorts has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

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

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Red Rock Resorts has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

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