Red Rock Resorts Inc. Class A Common Stock (RRR)

FairStock Score: 48/100 — MIXED

Key Financials

Strengths

• Generates $193 million in annual free cash flow (3.4% yield on market cap)
• Strong Piotroski F-Score of 8/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• High return on equity of 111.3% demonstrating efficient capital deployment

Concerns

• Trades significantly above Graham Number ($16) with negative 252% margin of safety—limited downside protection
• High leverage at 10.46x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 1.2 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Red Rock Resorts Inc. Class A Common Stock is a small-cap consumer cyclical company valued at $5.7 billion. The business generates $2.0 billion in annual revenue with a 2.2% net margin and $193 million in free cash flow. From a quality standpoint, Red shows near-perfect Piotroski F-Score of 8/9 indicating exceptional financial health and distressed Altman Z-Score of 1.2 warrants caution. On valuation, the stock is reasonably priced at 17.8x earnings, with trades far above its Graham Number ($16) with no margin of safety. Growth dynamics show revenue growing at 3.2% and profit growth of -4.1%. The 1.9% dividend yield adds an income component for patient holders. Our composite FairStock Score of 48/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $193 million in annual free cash flow (3.4% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 10.5x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer