Red Rock Trims 2025 Spending Plans by $25M, Stock Soars on Q2 Results
Posted on: July 30, 2025, 12:33h.
Last updated on: July 30, 2025, 12:47h.
- Company forecasting $325 million to $375 million in 2025 spending
- That’s down $25 million from prior estimates
- Stock surged after Red Rock posted its best quarter in its almost 50-year history
Shares of Red Rock Resorts (NASDAQ: RRR) surged Wednesday after the casino operator delivered the best quarterly results in its 49-year history and as the operator trimmed its 2025 capital expenditure forecast by $25 million.
In midday trading, shares of the Palace Station operator are higher by 8% on volume that’s already exceeded the daily average. Red Rock posted second-quarter results after the close of US markets Tuesday, telling investors net revenue increased 6.2% to $513.3 million while earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed 7.3% to $239.4 million. Those data points highlight strength in the Las Vegas locals demographic — the operator’s core constituency. Red Rock continues flexing its free cash flow muscle.
We converted 54% of our adjusted EBITDA into operating free cash flow, generating $124.3 million or $1.18 per share. This brings our year-to-date cumulative free cash flow to $217.3 million or $2.06 per share,” said CFO Stephen Cootey.
EBITDA margin jumped 47 basis points during the April through June period. CEO Frank Fertitta told analysts the worst of the cannibalization effects from the Durango Casino & Resort in Southwest Las Vegas are behind the operator, adding that the company’s namesake casino hotel in Summerlin should experience “full revenue recovery over the next couple of years.”
Speaking of Durango …
Durango opened in December 2023, and it’s rapidly become one of the jewels in the Red Rock portfolio, with Fertitta noting the operator has added 108K new customers to its database since the venue debuted.
He pointed out that Durango is “on pace to become one of our highest margin properties, delivering a return net of cannibalization of over 15% through the second quarter of 2025.” Durango is currently in the midst of a $120 million expansion, which is expected to be completed on budget and on time to be wrapped by December, slightly ahead of prior expectations.
Much of the growth in Durango’s customer database is attributable to the under 35 demographic, confirming Red Rock is finding ways to connect with younger customers at a time when Strip rivals are struggling to do the same.
In addition to the Durango enhancements, Red Rock is allocating $200 million to improvements at Green Valley Ranch in Henderson, and $53 million to sprucing up Sunset Station. Those projects are also on time and on budget.
Future Catalysts for Red Rock Shares
Shares of Red Rock are up 31.38% year to date, good for one of the best performances among all gaming equities. That rally puts some burden on the operator to answer “What’s next?” In terms of property-level details, more specifics pertaining to new development could emerge early next year.
Stifel analyst Steven Wieczynski notes that possible catalysts for further share price appreciation are hidden in plain sight. Namely, Red Rock management may not be getting the credit it deserves, and the same is true of the operator’s stash of undeveloped land.
“What we think continues to be overlooked with the RRR story is the value of their undeveloped land,” wrote the analyst in a new report. “We would highly encourage you to look at RRR’s recent investor presentation, which shows their average land holding is worth ~$2M per acre, which to us is well below what investors are currently embedding in the current share price.”
Last Comment ( 1 )
RR casino is a bit dated and mismatched decor. Overpriced food options. They pay low wages and self-insure to keep cots down. Can’t find a low dollar table anywhere.