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Why Is Red Rock Resorts (RRR) Up 4.5% Since Last Earnings Report?

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It has been about a month since the last earnings report for Red Rock Resorts (RRR - Free Report) . Shares have added about 4.5% 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 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’ Q3 Earnings & Revenues Beat Estimates

Red Rock Resorts reported third-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Earnings beat the consensus mark for the 14th straight quarter. Yet, the metrics declined on a year-over-year basis.

Earnings & Revenues

In the quarter under review, adjusted earnings per share (EPS) came in at 60 cents, outpacing the Zacks Consensus Estimate of 38 cents. In the prior-year quarter, it recorded adjusted EPS of 83 cents.

Quarterly revenues of $411.6 million surpassed the Zacks Consensus Estimate of $410 million but inched down 0.7% on a year-over-year basis. Adjusted EBITDA was $175.2 million, down 3.7% year over year.

Segmental Details

Las Vegas Operations: During third-quarter 2023, segmental revenues totaled $408 million, down 0.9% from $411.6 million in the prior-year quarter. Our projection was $405.3 million. Adjusted EBITDA was $191.4 million, down 4.3% year over year.

Native American Management: During the quarter under discussion, the company reported no segmental revenues.

Other Financial Details

As of Sep 30, 2023, Red Rock Resorts had cash and cash equivalents of $122.8 million compared with $117.3 million at 2022 end.

Outstanding debt at third-quarter end was $3.3 billion compared with $3.2 billion in the preceding quarter.

How Have Estimates Been Moving Since Then?

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

The consensus estimate has shifted -13.06% due to these changes.

VGM Scores

At this time, 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.

Performance of an Industry Player

Red Rock Resorts belongs to the Zacks Gaming industry. Another stock from the same industry, PENN Entertainment (PENN - Free Report) , has gained 2.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.

PENN Entertainment reported revenues of $1.62 billion in the last reported quarter, representing a year-over-year change of -0.3%. EPS of $1.21 for the same period compares with $0.72 a year ago.

PENN Entertainment is expected to post a loss of $0.31 per share for the current quarter, representing a year-over-year change of -338.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.2%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for PENN Entertainment. Also, the stock has a VGM Score of A.


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