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Investing.com - Citizens has reiterated its Market Outperform rating and $65.00 price target on Red Rock Resorts (NASDAQ:RRR), currently trading at $57.48, citing the company’s strong performance in the Las Vegas locals market. According to InvestingPro data, the stock appears slightly undervalued based on its Fair Value analysis.
Red Rock Resorts continues to gain market share with its Durango property addition, with market revenue up 1% quarter-to-date and 2% year-to-date, according to Citizens. The firm notes that despite softer visitation patterns and rate compression on the Las Vegas Strip, Red Rock has not experienced weakness across its enterprise. The company maintains impressive gross profit margins of 66.8% and has delivered a remarkable 46.9% return over the past six months.
The company saw some softness in same-store average daily rate trends during the summer slowdown, but occupancy increased, leaving revenue per available room nearly unchanged in recent months, Citizens reported.
Citizens believes Red Rock Resorts has one of the best setups for 2026 in the gaming space, with three renovated properties coming online in the next several months, continued backfilling of Red Rock Casino from Durango, benefits from a strong local consumer base, and estimates benefiting from approximately $25 million in renovation impact occurring in 2025.
The firm projects that Red Rock’s leverage will decline to the mid-3x range by the second half of 2026, positioning the company to announce its next slate of capital expenditure projects within the next six months, with an estimated $527 million in discretionary free cash flow generation in 2026.
In other recent news, Red Rock Resorts reported impressive financial results for the second quarter of 2025, with earnings per share reaching $0.95, surpassing the forecasted $0.41 by a significant margin. The company also reported revenue of $526.3 million, exceeding expectations of $487.61 million. Following these strong results, Mizuho raised its price target for Red Rock Resorts to $62.00 from $59.00, highlighting the robust performance of the Las Vegas segment, which generated $513.3 million in revenue. JMP Securities also adjusted its price target, increasing it to $64.00 from $57.00, maintaining a Market Outperform rating based on their valuation metrics. Additionally, Citizens JMP raised its price target to $65.00 from $64.00 and increased its EBITDAR estimates for 2025-2027. These developments reflect positively on Red Rock Resorts’ financial health and future prospects according to analysts.
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