RRR Stock Forecast & Price Target

Red Rock Resorts Inc. has demonstrated strong operational growth, with Las Vegas revenues and EBITDA increasing by 6% and 7% year-over-year respectively in 2Q25, further followed by 1% and 3% growth in 3Q25, showcasing margin expansions attributed to robust performance across both rated and unrated segments. The company is experiencing an encouraging trend with new member sign-ups rising approximately 10% year-over-year in 2Q25, along with significant growth in group bookings anticipated at 25% year-over-year in 4Q25, indicating increasing consumer engagement and confidence. Additionally, Red Rock Resorts has committed to returning capital to shareholders by raising its quarterly dividend by $0.01 in 4Q25, all while progressing on substantial organic development projects, notably the expansion of the Durango property.

The financial outlook for Red Rock Resorts is challenged due to an anticipated ~10% sequential EBITDA contraction from 2Q25 to 3Q25, primarily attributed to ongoing construction disruptions at key properties, which are expected to impact nearly $10 million in EBITDA in 4Q25. Additionally, despite a reduction in leverage to 3.89x and resumed share repurchases, concerns remain about the potential negative effects of observed weaknesses in the Las Vegas Strip market impacting the local market, suggesting vulnerability in revenue streams. The current environment fails to provide confidence in sustained performance, marking a cautious stance on the stock's prospects.