The CFO of Red Rock Resorts told Nevada regulators Wednesday that the company is coming off a “fantastic quarter,” while noting the operator isn’t getting the accolades it deserves from Wall Street.
Stephen Cootey, executive vice president and chief financial officer, appeared before the Nevada Gaming Control Board during a routine matter and was asked for a business update.
Red Rock Resorts set a first-quarter record for net revenue and the second-highest for adjusted earnings, while maintaining near-record margins of 46.5% in Las Vegas.
“I’m not sure it was that well-received by Wall Street, but sometimes we will never meet their expectations,” Cootey said. “Revenue for the quarter was $507 million, up about 2%. That represents the tenth-best consecutive quarter Red Rock Resorts has ever had, a phenomenal achievement. On the EBITDA side, we finished $212.5 million, down about 1%. That was probably the Street’s disappointment, but put it in perspective. That’s the second-best Q1 record in 50 years of the company. Some of the miss was related to construction projects that caused a bit more disruption than we anticipated. There were some elevated utility costs that we expect to continue through 2026.”
From a consumer perspective, Cootey said the locals market, despite what everyone hears with higher gas prices, continues to be strong across the database. The regional and national business also continues to strengthen as people travel to Las Vegas.
“I’m happy to say that trend is continuing in April,” Cootey said. “We love what we’re seeing and we’re investing in the business.”
Cootey said they spent about $117 million on various projects during the quarter and expect to inject $375 million to $425 million into Las Vegas in the next year. “That will touch every single one of our properties, including the taverns.”
The majority is focused on three projects – Sunset Station, Green Valley Ranch, and Durango.
Cootey said Red Rock Resorts is turning 50 this summer and announcements will be forthcoming on those details.
On Wednesday, Red Rock Resorts under its Station Casinos brand announced that its fifth Seventy Six by Station Casinos tavern will open June 4 in the southwest Las Vegas valley.
“We just opened our fourth (last week), and the strategy is to go into areas where we don’t have a larger property,” Cootey said. “It’s a customer gathering exercise and so far, the three taverns on line are performing really well. We look to bring at least three more taverns in the next few months.”
Cootey talked about their strategy and use of technology. Durango has an immersive sportsbook that is the “heart of the casino” and that version has been exported to Sunset Station.
“You can expect further redos from a sportsbook perspective,” Cootey said. “The taverns are sportsbooks. Most of the customers are young and male, and that’s their first or second spot to go watch sports. It is incredibly important for us to have the latest and greatest technology, because as soon as we put the latest technology in place, it’s already out of date. It’s very important to keep that fresh.”
Red Rock stock closed at $52.93 on Wednesday, down $1.77 over the past week, and is down $10 for the year.
Several Wall Street analysts continued their Buy rating for the stock with price targets around $70.
John DeCree, director of equity research at CBRE, said the consensus miss on Red Rock’s EBITDA may have been “overly ambitious,” because of construction disruption over a first quarter of 2025 record. “Adjusting for this, EBITDA would have grown 3% year-over-year and represented an all-time quarterly record for Las Vegas locals. Reported numbers came in short of this, but still represent the company’s second-best first quarter EBITDA performance in its history.”
Any bumps in 2026 due to construction disruption don’t change the long-term view, DeCree said.
“Despite the near-term headwinds, we remain encouraged by the solid underlying trends with continued growth across Red Rock Resorts assets not under renovation,” DeCree said. “Disruption will be more impactful than previously anticipated in the coming quarters; however, the picture for 2027 is unchanged, with Red Rock Resorts reaping returns from its various growth capex projects, accelerating Native American Management fees upon North Fork’s opening (in northern California) in late 2026, and a continuation of demographic and income tailwinds in the Las Vegas Valley. The further we zoom out our time horizon, the more attractive the shares appear, as 2027’s tailwinds are marginal compared to Red Rock’s growth opportunity through developing its land bank (of 462 acres).”
DeCree, however, lowered their price target from $80 to $70 because of the construction disruption.
“We continue to recommend the shares with a Buy rating as Red Rock’s disruption-normalized performance keeps the long-term thesis intact, while the resetting of expectations in the near-term could create an attractive buying opportunity for longer-term investors,” DeCree said.
