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Red Rock Resorts (RRR) Q1 Earnings Lag Estimates, Fall Y/Y

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Red Rock Resorts, Inc. (RRR - Free Report) reported first-quarter 2020 results, wherein earnings and revenues not only missed the Zacks Consensus Estimate but also declined on a year-over-year basis. Following the results, shares of the company declined nearly 5% during after-hours trading on May 19.

The company reported adjusted loss of 11 cents per share, which compared unfavorably with the Zacks Consensus Estimate of earnings 13 cents. Moreover, the reported figure declined from the year-ago quarter’s earnings of 16 cents.

Revenues during the quarter totaled $377.4 million, which missed the consensus mark of $438 million by 13.9%. Also, the top line declined 15.6% on a year-over-year basis. The decline can be primarily attributed to the temporary closure of all properties owing to the coronavirus outbreak.

In a bid to strengthen its liquidity position and prevent a possible recession, Red Rock Resorts suspended its quarterly dividend payouts for the remainder of 2020.

Red Rock Resorts, Inc. Price, Consensus and EPS Surprise


Segmental Details

Las Vegas Operations: Revenues in this segment totaled $356.5 million, down 15.6% year over year, primarily due to the temporary closure of all of the company's Las Vegas properties. Also, adjusted EBITDA declined 49.2% from the prior-year quarter’s figure to $68.5 million. The segment’s adjusted EBITDA margin contracted 1,269 basis points to 19.2%.

Native American Management: Revenues in the segment declined 16.2% to $19.3 million. Meanwhile, adjusted EBITDA declined 18% from the prior-year quarter’s figure to $17.6 million, mainly due to the temporary closure of Graton Resort.

Other Financial Details

As of Mar 31, 2020, Red Rock Resorts had cash and cash equivalent of $1.09 billion. Outstanding debt at the end of the reported quarter was $4.05 billion. 

Zacks Rank & Key Picks

Currently, Red Rock Resorts carries a Zacks Rank #4 (Sell). 

Some better-ranked stocks in the Consumer Discretionary sector are Capcom Co., Ltd. (CCOEY - Free Report) , K12 Inc (LRN - Free Report) and DouYu International Holdings Limited (DOYU - Free Report) . Capcom and K12 sport a Zacks Rank #1 (Strong Buy), while DouYu International carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

K12 has a three-five year earnings per share growth rate of 15%.

Capcom and DouYu International’s 2020 earnings are expected to rise 29.6% and 88.2%, respectively.

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