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Red Rock Resorts, Inc. (RRR) Down 15.5% 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, Inc. (RRR - Free Report) . Shares have lost about 15.5% 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, Inc. 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 Q1 Earnings Miss Estimates, Down Y/Y

Red Rock Resorts reported mixed first-quarter 2019 financial numbers, wherein earnings fell short of the Zacks Consensus Estimate but revenues surpassed the same. Notably, this marked the company's fifth straight quarter of revenue beat. However, earnings missed the estimate in two of the trailing three quarters.

Adjusted earnings came in at 16 cents per share missing the Zacks Consensus Estimate of 32 cents. In the prior-year quarter, the company had reported adjusted earnings of 41 cents per share. Revenues totaled $447 million, faring better than the Zacks Consensus Estimate of $445 million. The top line also increased 6.2% year over year. The uptick can primarily be attributed to year-over-year gain in Las Vegas operations, which overshadowed decline in Native American management fees.

Casino revenues in the quarter amounted to $244.9 million, up 3.7% on a year-over-year basis. While food and beverage revenues increased 15.4% to $104.9 million, other revenues rose 14.9% to $25.9 million. Room revenues also increased 3.1% to $48.1 million. However, management fees revenues declined 6.2% to $23.2 million.

Segmental Details

Las Vegas Operations

Revenues at this segment summed $422.4 million, up 6.9% year over year. Also, the segment’s adjusted EBITDA increased to $130.5 million, up 3.7% year over year. Results were driven by robust performance across both the gaming and non-gaming segments.

Native American Management

Revenues at this segment declined 6.2% to $23 million. Meanwhile, adjusted EBITDA decreased to $21.5 million from $22.1 million on termination of the Gun Lake management agreement in February 2018.

Other Financial Details

As of Mar 31, 2019, Red Rock Resorts had cash and cash equivalent of $109.2 million. Outstanding debt at the end of the reported quarter was $3 billion. The company declared a quarterly cash dividend of 10 cents, payable Jun 28, 2019, to its shareholder of record as of Jun 14, 2019.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -12.73% due to these changes.

VGM Scores

Currently, Red Rock Resorts, Inc. 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, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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