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Why Is Red Rock Resorts, Inc. (RRR) Up 46.6% Since Last Earnings Report?

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It has been about a month since the last earnings report for Red Rock Resorts, Inc. (RRR - Free Report) . Shares have added about 46.6% in that time frame, outperforming the S&P 500.

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

Red Rock Resorts Q2 Earnings Beat Estimates, Fall Y/Y

Red Rock Resorts reported second-quarter 2020 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. However, the top and the bottom line declined on a year-over-year basis.

Although the pandemic severely impacted the company’s operations during the second quarter, the company’s Las Vegas properties witnessed solid performance post-reopening from Jun 4 through Jun 30, 2020. Adjusted EBITDA during this period increased 46.8%, while adjusted EBITDA margin increased 2,192 basis points to 45.9%.

Earnings & Revenues

In the quarter under review, adjusted loss per share came in at $1.01, narrower than the Zacks Consensus Estimate of a loss of $1.04. In the prior-year quarter, the company had reported adjusted earnings of 13 cents per share.

Revenues during the quarter totaled $108.5 million, beating the consensus mark of $82 million by 32.3%. However, the top line declined 77.5% on a year-over-year basis primarily because of the temporary closure of all properties owing to the coronavirus outbreak.

Segmental Details

Las Vegas Operations: Revenues at this segment totaled $101 million, down 77.9% year over year primarily due to the temporary closure of all of the company's Las Vegas properties. Also, adjusted EBITDA declined 111.4% from the prior-year quarter’s figure to ($12.1) million.

Native American Management: Revenues at the segment declined 74.9% to $5.9 million. Meanwhile, adjusted EBITDA declined 76.3% from the prior-year quarter’s figure to $5.2 million, mainly due to the temporary closure of Graton Resort.

Other Financial Details

As of Jun 30, 2020, Red Rock Resorts had cash and cash equivalent of $270.1 million. Outstanding debt at the end of the second quarter was $3.3 billion.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 102.9% due to these changes.

VGM Scores

Currently, Red Rock Resorts, Inc. has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Red Rock Resorts, Inc. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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