Here's Why Investors Should Retain Red Rock Resorts Stock Now

Red Rock Resorts, Inc. RRR is likely to benefit from Las Vegas operations, solid Durango Casino Resort performance and property enhancements. Also, the focus on the North Fork project bodes well. However, an uncertain macroeconomic environment is a concern.

Let us discuss the factors that highlight why investors should retain the stock for now.

Factors Driving Growth of RRR Stock

Red Rock Resorts continues to demonstrate strength through strategic growth and disciplined execution. RRR’s Durango Casino & Resort remains a standout, driving customer acquisition and positioning itself as one of the most profitable assets. Despite some cannibalization at Red Rock Resorts, recovery is ahead of expectations, courtesy of strong demographic tailwinds in the Las Vegas Valley.

The company has been actively reinvesting in its core properties. Upgrades at Sunset Station and Green Valley Ranch are designed to capture demand from growing communities, while the $120 million Durango expansion will further enhance long-term returns. Red Rock Resorts’ real estate pipeline and disciplined capital spending support its growth outlook.

The North Fork project in California adds another layer of value. This tribal development marks a major milestone in Red Rock Resorts' multi-decade partnership with the North Fork tribe. The project’s delayed draw structure is expected to lower capitalized interest by nearly $100 million, while Red Rock Resorts has already recouped $110.5 million in previously invested capital. Once operational, the North Fork property will likely serve as a new growth engine, delivering best-in-class gaming amenities and creating a new revenue stream outside Nevada.

Red Rock Resorts' capital return strategy underscores its financial strength and shareholder commitment. In addition to a regular quarterly dividend, the company declared a special $1 per share dividend, bringing total shareholder returns in 2025 to $159 million. With a clean balance sheet, significant real estate holdings and more than $300 million in remaining share repurchase capacity, Red Rock is well-positioned to create long-term value for investors.

Concerns for RRR Stock

The stock has lost 7.7% in the past year against the industry’s 25.6% rise. This downside was due to an uncertain macroeconomic environment.

Red Rock Resorts continues to witness the impacts of inflation and increased energy costs. It also reported elevated prices concerning food and beverages, and rooms. In the first quarter of 2025, expenses across casino, food and beverage, and room increased year over year to $89.4 million, $73.8 million and $16 million, respectively, from $85 million, $73.4 million and $15.9 million. The company intends to focus on cost controls and price adjustments to counter the same.

RRR’s Zacks Rank and Stocks to Consider

Red Rock Resorts currently carries a Zacks Rank #3 (Hold). 

Some better-ranked stocks from the Zacks Consumer-Discretionary sector are Fox Corporation FOX, Stride, Inc. LRN and Laureate Education, Inc. LAUR. 
  
Fox currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
 
The company delivered a trailing four-quarter earnings surprise of 30.9%, on average. The stock has gained 9.9% in the year-to-date period. The Zacks Consensus Estimate for Fox’s fiscal 2025 sales and earnings per share (EPS) implies growth of 15.3% and 32.4%, respectively, from the year-ago levels.
 
Stride currently sports a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 94.7%, on average. The stock has gained 45.6% in the year-to-date period.
 
The Zacks Consensus Estimate for Stride’s fiscal 2025 sales and EPS indicates an increase of 16.7% and 51.2%, respectively, from the year-ago levels.

Laureate Education presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 56.1%, on average. The stock has moved up 23% in the year-to-date period.
 
The Zacks Consensus Estimate for Laureate’s 2025 sales and EPS indicates growth of 0.3% and 23.7%, respectively, from the year-ago period’s levels.

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This article originally published on Zacks Investment Research (zacks.com).

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