Red Rock Resorts, Inc. Just Reported A Surprise Loss: Here's What Analysts Think Will Happen Next
The quarterly results for Red Rock Resorts, Inc. (NASDAQ:RRR) were released last week, making it a good time to revisit its performance. Revenues of US$489m beat expectations by 2.3%. Unfortunately statutory earnings per share (EPS) fell well short of the mark, turning in a loss of US$0.17 compared to previous analyst expectations of a profit. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Red Rock Resorts after the latest results.
After the latest results, the 16 analysts covering Red Rock Resorts are now predicting revenues of US$2.15b in 2027. If met, this would reflect an okay 6.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 24% to US$2.48. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.15b and earnings per share (EPS) of US$2.65 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
Check out our latest analysis for Red Rock Resorts
The consensus price target held steady at US$71.06, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Red Rock Resorts analyst has a price target of US$78.00 per share, while the most pessimistic values it at US$59.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Red Rock Resorts'historical trends, as the 5.0% annualised revenue growth to the end of 2027 is roughly in line with the 5.6% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.1% per year. So although Red Rock Resorts is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Red Rock Resorts. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Red Rock Resorts' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Red Rock Resorts. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Red Rock Resorts going out to 2028, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 4 warning signs for Red Rock Resorts (1 is significant) you should be aware of.
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