Analyzing Red Rock Resorts (NASDAQ:RRR) and Rush Street Interactive (NYSE:RSI)

Rush Street Interactive (NYSE:RSI) and Red Rock Resorts (NASDAQ:RRR) are both mid-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Insider & Institutional Ownership

24.8% of Rush Street Interactive shares are held by institutional investors. Comparatively, 47.8% of Red Rock Resorts shares are held by institutional investors. 56.9% of Rush Street Interactive shares are held by company insiders. Comparatively, 53.8% of Red Rock Resorts shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Rush Street Interactive and Red Rock Resorts’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rush Street Interactive	2.83%	17.11%	8.27%
Red Rock Resorts	9.35%	58.12%	4.75%

Analyst Recommendations

This is a breakdown of current recommendations for Rush Street Interactive and Red Rock Resorts, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rush Street Interactive	0	3	8	0	2.73
Red Rock Resorts	0	4	11	0	2.73

Rush Street Interactive presently has a consensus price target of $21.38, suggesting a potential upside of 33.37%. Red Rock Resorts has a consensus price target of $70.71, suggesting a potential upside of 14.80%. Given Rush Street Interactive’s higher possible upside, equities research analysts plainly believe Rush Street Interactive is more favorable than Red Rock Resorts.

Risk and Volatility

Rush Street Interactive has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500. Comparatively, Red Rock Resorts has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.

Valuation & Earnings

This table compares Rush Street Interactive and Red Rock Resorts”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rush Street Interactive	$924.08 million	3.98	$2.39 million	$0.25	64.11
Red Rock Resorts	$2.01 billion	3.24	$154.05 million	$3.13	19.68

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

Summary

Red Rock Resorts beats Rush Street Interactive on 8 of the 14 factors compared between the two stocks.

About Rush Street Interactive

Rush Street Interactive, Inc. operates as an online casino and sports betting company in the United States, Canada, Mexico, and rest of Latin America. It provides real-money online casino, online and retail sports betting, and social gaming services. In addition, the company offers full suite of games comprising of bricks-and-mortar casinos, table games, and slot machines. The company markets its online casino and sports betting under BetRivers, PlaySugarHouse, and RushBet brands. Rush Street Interactive, Inc. was founded in 2012 and is headquartered in Chicago, Illinois.

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.