Is It Time To Consider Buying Red Rock Resorts, Inc. (NASDAQ:RRR)?

While Red Rock Resorts, Inc. (NASDAQ:RRR) might not have the largest market cap around , it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$52.91 and falling to the lows of US$37.60. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Red Rock Resorts' current trading price of US$40.76 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Red Rock Resorts’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

We've discovered 2 warning signs about Red Rock Resorts. View them for free.

What Is Red Rock Resorts Worth?

Great news for investors – Red Rock Resorts is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Red Rock Resorts’s ratio of 15.75x is below its peer average of 22.13x, which indicates the stock is trading at a lower price compared to the Hospitality industry. What’s more interesting is that, Red Rock Resorts’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

View our latest analysis for Red Rock Resorts

Can we expect growth from Red Rock Resorts?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Red Rock Resorts' earnings over the next few years are expected to increase by 40%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since RRR is currently below the industry PE ratio, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on RRR for a while, now might be the time to enter the stock. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy RRR. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed assessment.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For instance, we've identified 2 warning signs for Red Rock Resorts (1 is concerning) you should be familiar with.

If you are no longer interested in Red Rock Resorts, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.