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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Red Rock Resorts, Inc. (XNAS:RRR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
RRR
Name:
RED ROCK RESORTS, INC. (XNAS:RRR)
Sector:
118.52M
Industry:
Resorts & Casinos
CEO:
Mr. Frank Fertitta
Total Employees:
7,800
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -14.45% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF RED ROCK RESORTS, INC.(RRR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RESORTS & CASINOS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
37.32
One Month Price Target:
$37.79
Six Month Price Target :
$40.15
Likely Price in One Year's Time:
Ticker:
$42.98
Likely Trading Range Today Under (Normal Volatility)
$37.08
Price Upper limit ($) :
$37.7
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$33.62
This week:
$29.05
This month :
$20.78
Other Primary facts
Market Cap:
3.90B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
104.43M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
53.72%
-34.72%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$54.47
$46.51
$20.17
$28.13
Medium risk (<10%) entry points
Buy Call
Sell Call
$43.92
Buy Put:
Sell Put:
$42.23
$30.69
$32.41
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
RRR
Sharpe Ratio:
3.67%
Comparison:
RRR, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 31.25% higher than the industry
& ratio is 60.89% higher than the market/S&P 500 average
Average Returns/Yield of
RRR
Daily returns:
0.19%
Weekly returns:
0.95%
Monthly returns:
3.78%
Yearly returns:
33.63%
Comparison of returns:
Average annual returns/yield (last 3 years) is 34.99% above industry average
Classification:
RRR, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.24
Statistical test of Returns:
RRR has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.92%
Weekly Volatility:
10.99%
Monthly Volatility:
21.99%
Yearly Volatility:
76.17%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.06%
Volatility in last five trading days has been -78.39% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-9.91%
Weekly VaR:
-22.16%
Monthly VaR:
-44.31%
How Much Can the price of
RRR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-37%
Worst case (decline):
>85%
This translates to price declining to:
$23.51
This translates to price declining to:
$5.60
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
RRR is a 212.76% riskier investment compared to the market/S&P 500 & is 167.94% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 10.33% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
RRR
Beta in relation to market/S&P 500--2.26
Expected beta in 1 year's time:
1.176
Expected beta in 3 year's time:
1.663
Unlevered (debt free) Beta:
0.061
Beta in relation to Nasdaq (XNAS):
1.406
Beta in relation to all global stocks::
1.461
Beta Comparison & Analysis
Beta of competitors/peers::
1.447
Beta is 55.84% higher than peers
Average Industry Beta:
2.078
Beta is 8.55% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
73.73%
Sustainable growth rate is 146.00% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.268
Alpha is 64.94% above industry average alpha yield
Alpha is 1706% higher than market/& is unsustainably high
Analysis of Cost of Capital of
RRR
Equity cost of capital:
0.186
Equity cost of capital is 7.00% above industry mean WACC
Unlevered (without debt) cost of capital:
0.51%
Before-tax cost of debt:
3.60%
After-tax cost of debt:
2.84%
Overall debt rating:
Upper medium A grade (third highest grade),CO8<=0.0429,"Medium BBB grade (Fourth highest grade)
Weighted average cost of capital (WACC):
2.84%
WACC is -48.24% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$15.96
Revenue growth rate per share of (3Y):
40.27
Annual revenue growth rate is -119.53% below industry average
EPS:
$0.30
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$8.87
Balance sheet equity growth per share: -100.00%
Equity growth rate per share is 95.09% higher than the industry
Debt per share
$27.03
EBITDA per share
$5.15
Valuation Analysis Today of
RRR
P/E Ratio:
12.67
P/E Ratio of Competitors/Peers:
19
P/E ratio is -33.34% lower than main peers & is -69.76% lower than the industry
Stock price/value with industry average P/E ratio: $12.57
RRR is 196.93% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.34
Price to sales ratio is -6.59% below the industry mean
P/B (Price to book value ratio):
40.27
Price to free cash flow: 4.21
Price to free cash flow ratio is -73.88% lower than the industry
Net income growth rate (3Y):
53.61%
Net income growth rate is -181.44% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 4.45%
Dividend yeild: 9.65%
Previous Dividend: $0.25
Previous adjusted dividend: $0.25
Previous Dividend: $3.60
Expected next dividend best case: $2.37
Expected next dividend worst case: -$1.87
Average dividend payment (long-term): $0.74
Average dividend increase/decrease (growth rate) % per period: 702.08%
Expected next dividend payment date: 28/09/2022
Expected next dividend record date: 14/09/2022
-
Previous dividend payment date: 30/06/2022
Previous dividend record date: 16/06/2022
-
Dividend History:
2022-06-15--$0.25
2021-11-22--$3.00
2019-12-12--$0.10
2022-03-14--$0.25
2020-03-12--$0.10
--$0.00
Dividend growth rate is -1527.91% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
3214.64%
Net debt to equity ratio:
2864.39%
Debt to assets ratio:
87.95%
Net debt to assets ratio:
78.37%
Debt-to-asset ratio is 20.28% above industry average
Ability to repay debt:
Interest coverage ratio:
5.24
Interest coverage ratio is -0.67% less than industry average
Looking forward:
Debt growth rate:
-2.56%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.22%
Analysis of Key Statistics
Correlation of price movement with the market:
0.559
Statistical significance of correlation:
RRR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.569
Stock price is -1.79% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.569
Correlation of price movement with Nasdaq (^IXIC):
0.003
Covariance of price movement with the market:
0.007
Kurtosis
28.795
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.972
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
RRR
Gross Profit Margin Ratio:
262%
Operating Profit Margin Ratio:
36.20%
Operating profit margin is 393.89% higher than the industry
Net Profit Margin Ratio:
262%
Effective Tax Rate:
-11.43%
Effective tax rate is -127.66% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
404.25%
Return on equity (ROE) is 1819.92% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
11.06%
Return on assets (ROA) is 187.30% higher than the industry
Financial Leverage:
8.3x
Current Ratio:
1.98
Current ratio is -10.46% below industry average
Cash Conversion Cycle (days):
-1.3
Cash conversion cycle is -103.24% below industry average
The remaining useful life of property plant & equipment is: 10.9 years
Stock based compensation to net income ratio:
0.99%
In-depth Efficiency Analysis
Revenue generated per employee:
213.7K
Each employee generates -18% less revenue than industry average revenue per employee
EBITDA generated per employee:
68.9K
Each employee generates -2% less EBITDA than industry average revenue per employee
Profit generated per employee:
45.5K
Each employee generates 110% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
15.2K
Each employee generates 52% more free cash flow than industry average revenue per employee
Assets/Capital per employee
351.2K
Each employee generates 52% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
RRR
FRONTDOOR, INC. (XNAS:FTDR)
QURATE RETAIL, INC. (XNAS:QRTEB)
QURATE RETAIL, INC. (XNAS:QRTEA)
RUSH ENTERPRISES, INC. (XNAS:RUSHA)
Cracker Barrel Old Country Store, Inc. (XNAS:CBRL)
VISTEON CORPORATION (XNAS:VC)
LGI HOMES, INC. (XNAS:LGIH)
GENTHERM INCORPORATED (XNAS:THRM)
HOVNANIAN ENTERPRISES, INC. (XNAS:HOVNP)
Current Analyst Ratings
Strong buy�13%
Buy�25%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.67B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
572.82M
1.09B
-
-
354.48M
-
136.96M
491.44M
-
102.61M
136.96M
537.76M
603.49M
354.97M
496.85M
- 56785.00K
354.97M
Statement of Cash Flow
Date:
Period:
33.43M
Differed Income Tax :
6.11M
Stock Based Compensation :
3.51M
Change in Working Capital :
19.35M
Accounts Receivables:
-
Other Working Capital:
4.10M
Other Non-Cash Items:
2.83M
Net Cash Provided by Operating Activities:
157.47M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
336.57M
-
336.57M
34.87M
11.90M
86.65M
469.99M
2.26B
195.68M
86.77M
5.94M
92.51M
97.72M
2.74B
-
3.21B
18.21M
29.01M
4.84M
14.56M
175.00M
236.78M
2.82B
53.15M
2.88B
-
3.11B
616.00K
36.94M
-
50.25M
March 31, 2022 at 6:00:00 AM
1.06B
87.81M
3.20B
-
2.85B
2.5B
-
- 40131.00K
- 40131.00K
- 6195.00K
-
- 10774.00K
- 15789.00K
- 23291.00K
- 56049.00K
-
61.29M
368.54M
307.26M
157.47M
- 38945.00K
118.52M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
RRR
2023
2024
2025
2026
2027
$43.19
$33.67
$38.77
$44.65
$51.41