Frank J. Fertitta III Sees Potential Growth And Acquires $153K In Red Rock Resorts Stock Options

On February 19, III, Chief Executive Officer at Red Rock Resorts RRR, executed a strategic insider move by acquiring stock options for 189,275 shares.

What Happened: Uncovered in a Form 4 filing on Wednesday with the U.S. Securities and Exchange Commission, III, Chief Executive Officer at Red Rock Resorts, executed an insider options move. This move consisted of acquiring stock options for 189,275 shares of RRR, granting III the right to purchase the company's stock at an exercise price of $52.1 per share.

The latest update on Wednesday morning shows Red Rock Resorts shares down by 0.0%, trading at $52.91. At this price, III's 189,275 shares are worth $153,312.

Unveiling the Story Behind Red Rock Resorts

Red Rock Resorts Inc along with its subsidiary is a gaming, development, and management company. The company mainly develops strategically located casino and entertainment properties. It generates a majority of its revenue from Casino.

Breaking Down Red Rock Resorts's Financial Performance

Revenue Growth: Over the 3 months period, Red Rock Resorts showcased positive performance, achieving a revenue growth rate of 13.7% as of 30 September, 2024. This reflects a substantial increase in the company's top-line earnings. When compared to others in the Consumer Discretionary sector, the company excelled with a growth rate higher than the average among peers.

Holistic Profitability Examination:

• Gross Margin: The company excels with a remarkable gross margin of 60.78%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): The company excels with an EPS that surpasses the industry average. With a current EPS of 0.49, Red Rock Resorts showcases strong earnings per share.

Debt Management: The company faces challenges in debt management with a debt-to-equity ratio higher than the industry average. With a ratio of 19.63, caution is advised due to increased financial risk.

Financial Valuation:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 20.91, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 2.83 as compared to the industry average, the stock might be considered overvalued based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a below-average EV/EBITDA ratio of 8.71, Red Rock Resorts presents an opportunity for value investors. This lower valuation may attract investors seeking undervalued opportunities.

Market Capitalization Analysis: The company exhibits a lower market capitalization profile, positioning itself below industry averages. This suggests a smaller scale relative to peers.

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Understanding the Significance of Insider Transactions

Insider transactions serve as a piece of the puzzle in investment decisions, rather than the entire picture.

When discussing legal matters, the term "insider" refers to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

A new purchase by a company insider is a indication that they anticipate the stock will rise.

On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Unlocking the Meaning of Transaction Codes

When dissecting transactions, the focal point for investors is often those occurring in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Red Rock Resorts's Insider Trades.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.