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What Should We Expect From Red Rock Resorts Inc’s (NASDAQ:RRR) Earnings Over The Next Few Years?

Victor Youngblood

Red Rock Resorts Inc’s (NASDAQ:RRR) announced its latest earnings update in December 2017, which indicated that the business experienced a minor headwind with earnings declining from US$35.29M to US$35.15M, a change of -0.40%. Below, I’ve presented key growth figures on how market analysts predict Red Rock Resorts’s earnings growth trajectory over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. View our latest analysis for Red Rock Resorts

Analysts’ outlook for next year seems buoyant, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally generating US$227.89M in 2021.

NasdaqGS:RRR Future Profit Mar 10th 18

Even though it is useful to understand the growth year by year relative to today’s figure, it may be more valuable evaluating the rate at which the earnings are moving on average every year. The pro of this technique is that we can get a better picture of the direction of Red Rock Resorts’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 44.61%. This means that, we can presume Red Rock Resorts will grow its earnings by 44.61% every year for the next few years.

Next Steps:

For Red Rock Resorts, there are three important factors you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is RRR worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether RRR is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of RRR? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.