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Why Is Red Rock Resorts (RRR) Down 5.5% Since Last Earnings Report?

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It has been about a month since the last earnings report for Red Rock Resorts (RRR). Shares have lost about 5.5% 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 Q1 Earnings Top Estimates, Revenues Lag

Red Rock Resorts reported first-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same. Earnings beat the estimates for the eighth straight quarter. The top and the bottom lines increased on a year-over-year basis.

Earnings & Revenues

In the quarter under review, adjusted earnings per share (EPS) came in at 77 cents, which beat the Zacks Consensus Estimate of 53 cents. In the prior-year quarter, the company had reported a loss per share of 92 cents.

Quarterly revenues of $401.6 million lagged the consensus mark of $406 million. However, the top line improved 14% on a year-over-year basis. The upside was primarily driven by the streamlining of operations, optimization of marketing initiatives and renegotiating vendor and third-party agreements. Meanwhile, adjusted EBITDA in the quarter was $178.7 million, up 14% year over year.

Segmental Details

Las Vegas Operations: During first-quarter 2022, revenues in the segment totaled $399.7 million compared with $342.8 million reported in the prior-year quarter. The upside can primarily be attributed to the increased time spent on devices and strong spending per visit across its portfolio. The segments' adjusted EBITDA was $194.6 million, up 21% year over year.

Native American Management: During the quarter under discussion, the company did not report any revenues in the Native American Management segment. In the prior-year quarter, the company reported segmental revenues of $8.1 million.

Other Financial Details

As of Mar 31, 2022, Red Rock Resorts had cash and cash equivalent of $336.6 million compared with $275.3 million reported in the previous quarter. Outstanding debt at the end of the first quarter amounted to $2.89 billion, flat year over year.

How Have Estimates Been Moving Since Then?

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

VGM Scores

At this time, Red Rock Resorts has a nice Growth Score of B, though it is lagging a lot 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 B. 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 has been net zero. 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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