It has been about a month since the last earnings report for Red Rock Resorts (RRR). Shares have added about 7.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Red Rock Resorts due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.
Red Rock Resorts Q1 Earnings Beat Estimates, Revenues Lag
Red Rock Resorts reported first-quarter 2026 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line increased year over year, while the bottom line declined.
In the quarter under review, adjusted earnings per share (EPS) came in at 73 cents, topping the Zacks Consensus Estimate of 54 cents by 35.2%. In the prior-year quarter, the company recorded an adjusted EPS of 75 cents.
Quarterly revenues of $507.3 million missed the Zacks Consensus Estimate of $510 million. However, the top line increased 1.9% year over year.
Consolidated adjusted EBITDA margin held at a still-healthy 41.9%, as steady gaming fundamentals helped offset disruption tied to ongoing property projects.
RRR Keeps the Top-Line Growing With Casino-Led Mix
Casino revenues remained the anchor in the quarter, increasing to $340.5 million from $333.2 million a year ago. Food and beverage revenues also edged higher to $90.3 million, reflecting continued guest demand across the portfolio’s outlets.
Hotel was the notable soft spot within the mix, with room revenues declining to $45.5 million from $50.2 million in the year-ago quarter. Other revenues increased to $26.2 million, while Native American management and development fees added $4.7 million, tied to the North Fork project.
Red Rock Resorts Highlights Strength in Las Vegas Operations
The company’s Las Vegas operations continued to set the tone, delivering net revenues of $499.5 million and underscoring management’s view that the locals customer remains resilient despite a choppier macro backdrop later in the quarter.
During the quarter, the company reported sustained traction in carded slot play, helped by robust spend per visit and net theoretical win across local, regional and national customer segments. It also emphasized that Durango’s continued ramp and the associated “backfill” at core properties remain central to the portfolio’s growth strategy.
RRR Absorbs Higher Costs as Renovations Pressure Results
Expense discipline was mixed in the period. Selling, general and administrative costs increased to $114.4 million from $104.7 million, while depreciation and amortization rose to $55.9 million from $48.3 million, reflecting the company’s elevated reinvestment cycle.
Operationally, management framed much of the year-over-year profitability pressure as project-related, with Green Valley Ranch renovations reducing room nights and creating temporary friction at the property. The company also cited elevated utilities and certain non-recurring items as incremental headwinds during the quarter.
Red Rock Resorts Converts Cash Flow and Returns Capital
RRR generated $107 million of operating free cash flow, or $1.03 per share, converting 50.3% of adjusted EBITDA into operating free cash flow in the quarter. Management said this cash flow supported both the company’s capital program and shareholder returns.
Capital allocation remained active. During the quarter, the company repurchased roughly 635,000 Class A shares at an average price of $60.32 and paid a $1.00 per-share special dividend alongside the regular $0.26 quarterly dividend. The board also declared another $0.26 per-share dividend for the second quarter of 2026, payable June 30, to its shareholders of record June 15.
RRR’s Outlook Centers on Durango and North Fork Milestones
Management guided to full-year 2026 capital spending of $375-$425 million, including $275-$300 million of investment capital and $100-$125 million of maintenance capital. The spend reflects continued work at Durango, Sunset Station and Green Valley Ranch, where renovations are intended to refresh the product and support higher-value visitation over time.
Two longer-dated growth catalysts also moved forward. The Durango North expansion is slated to add more than 275,000 square feet, including additional gaming and new amenities such as a bowling facility and luxury theaters, with an expected opening in summer 2027 and an estimated cost of about $385 million. Meanwhile, North Fork construction remains on track for an early fourth-quarter 2026 opening, with total project cost held at roughly $750 million and a remaining note balance of $80.6 million due from the Tribe at quarter's end.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -22.63% due to these changes.
VGM Scores
At this time, Red Rock Resorts has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Red Rock Resorts has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Red Rock Resorts, Inc. (RRR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).