Red Rock Resorts, Inc. (RRR) stock analysis

P/E above its 5-year median

Red Rock Resorts's P/E of 30.0 is above its own 5-year median of 19.1.

P/E above the industry

Red Rock Resorts's P/E of 30.0 is above the Hotels and Motels median of 25.6.

EV/EBITDA above its 5-year median

Red Rock Resorts's EV/EBITDA of 13.2 is above its 5-year median of 11.1.

P/B above the industry

Red Rock Resorts's price-to-book of 32.01 is above the Hotels and Motels median of 2.81.

Trading above fair value

The share price of $50.18 is above our fair value estimate of $35.15.

Margin of safety under 20%

The price is 42.8% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 6.5% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -2.4% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 1.1% over the last twelve months; the Hotels and Motels median is 3.9%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

This company does not report gross profit.

Return on equity over 15%

Return on equity was 60.8% over the last twelve months and averaged 170% over five years.

Return on capital over 10%

Return on invested capital was 10.7%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Red Rock Resorts's return on equity of 60.8% is above the Hotels and Motels median of 20.0%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was 5.8% over the last twelve months, against a 5-year average of 11.0%.

Net margin above the industry

Red Rock Resorts's net margin of 5.8% is above the Hotels and Motels median of 5.7%.

High debt

Debt is 2261% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 823% five years ago to 2261%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 15.7% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 2.3 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.84 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.58; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Red Rock Resorts paid dividends worth 2.1% of the share price over the last twelve months.

Yield below Treasuries

The 2.1% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Red Rock Resorts yields 2.1%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 7 fiscal years.

Not covered by earnings

Dividends take 104% of net income, leaving little room.

Not covered by free cash flow

Dividends take 239% of free cash flow.