Financial Analysis: Red Rock Resorts (NASDAQ:RRR) & Playtika (NASDAQ:PLTK)

Red Rock Resorts (NASDAQ:RRR) and Playtika (NASDAQ:PLTK) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Analyst Ratings

This is a summary of current recommendations for Red Rock Resorts and Playtika, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red Rock Resorts	0	4	9	1	2.79
Playtika	0	6	3	0	2.33

Red Rock Resorts currently has a consensus target price of $64.42, suggesting a potential upside of 2.04%. Playtika has a consensus target price of $6.00, suggesting a potential upside of 45.99%. Given Playtika’s higher possible upside, analysts plainly believe Playtika is more favorable than Red Rock Resorts.

Profitability

This table compares Red Rock Resorts and Playtika’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red Rock Resorts	9.52%	59.86%	4.80%
Playtika	3.16%	-114.44%	3.23%

Risk and Volatility

Red Rock Resorts has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500. Comparatively, Playtika has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.

Earnings & Valuation

This table compares Red Rock Resorts and Playtika”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red Rock Resorts	$1.94 billion	3.45	$154.05 million	$3.14	20.11
Playtika	$2.55 billion	0.61	$162.20 million	$0.24	17.13

Playtika has higher revenue and earnings than Red Rock Resorts. Playtika is trading at a lower price-to-earnings ratio than Red Rock Resorts, indicating that it is currently the more affordable of the two stocks.

Dividends

Red Rock Resorts pays an annual dividend of $1.04 per share and has a dividend yield of 1.6%. Playtika pays an annual dividend of $0.40 per share and has a dividend yield of 9.7%. Red Rock Resorts pays out 33.1% of its earnings in the form of a dividend. Playtika pays out 166.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

47.8% of Red Rock Resorts shares are held by institutional investors. Comparatively, 11.9% of Playtika shares are held by institutional investors. 53.3% of Red Rock Resorts shares are held by insiders. Comparatively, 4.8% of Playtika shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Red Rock Resorts beats Playtika on 13 of the 17 factors compared between the two stocks.

About Red Rock Resorts

Red Rock Resorts, Inc., through its interest in Station Casinos LLC, develops and operates casino and entertainment properties in the United States. The company owns and operates gaming and entertainment facilities, including Durango Casino & Resort and smaller casinos in the Las Vegas regional market. The company was formerly known as Station Casinos Corp. and changed its name to Red Rock Resorts, Inc. in January 2016. Red Rock Resorts, Inc. was founded in 1976 and is based in Las Vegas, Nevada.

About Playtika

Playtika Holding Corp., together with its subsidiaries, develops mobile games in the United States, Europe, Middle East, Africa, Asia pacific, and internationally. The company owns a portfolio of casual and social casino-themed games. It distributes its games to the end customer through various web and mobile platforms and direct-to-consumer platforms. Playtika Holding Corp. was founded in 2010 and is headquartered in Herzliya Pituach, Israel. Playtika Holding Corp. is a subsidiary of Playtika Holding UK II Limited.