RRR
Red Rock Resorts, Inc.
$64.75
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 12.3% below fair value
You pay
$64.75
Bear
$59.16
Fair
$73.81
Bull
$87.38
Bear
$59.16
-8.6%
5% stage 1 growth, 12% discount
Fair
$73.81
+14.0%
8% stage 1 growth, 12% discount
Bull
$87.38
+35.0%
10% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
33%
Implied Market Multiple
14.0x
Market is pricing in (growth)
5.9%
vs 7.9% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $71.82 from 30 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $73.81 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions