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

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

Risk and Volatility

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

Profitability

This table compares Red Rock Resorts and Rush Street Interactive’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%
Rush Street Interactive	2.83%	17.11%	8.27%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red Rock Resorts	$1.94 billion	3.65	$154.05 million	$3.14	21.27
Rush Street Interactive	$924.08 million	4.31	$2.39 million	$0.25	69.41

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.

Insider and Institutional Ownership

47.8% of Red Rock Resorts shares are owned by institutional investors. Comparatively, 24.8% of Rush Street Interactive shares are owned by institutional investors. 53.3% of Red Rock Resorts shares are owned by insiders. Comparatively, 56.9% of Rush Street Interactive shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

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

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

Red Rock Resorts currently has a consensus price target of $66.50, suggesting a potential downside of 0.43%. Rush Street Interactive has a consensus price target of $21.38, suggesting a potential upside of 23.18%. Given Rush Street Interactive’s higher probable upside, analysts clearly believe Rush Street Interactive is more favorable than Red Rock Resorts.

Summary

Red Rock Resorts beats Rush Street Interactive on 8 of the 14 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 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.