Reviewing Red Rock Resorts (NASDAQ:RRR) & DoubleDown Interactive (NASDAQ:DDI)

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

Volatility and Risk

DoubleDown Interactive has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, Red Rock Resorts has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500.

Valuation & Earnings

This table compares DoubleDown Interactive and Red Rock Resorts”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DoubleDown Interactive	$341.33 million	1.27	$124.11 million	$2.30	3.81
Red Rock Resorts	$2.00 billion	3.34	$154.05 million	$3.14	20.05

Red Rock Resorts has higher revenue and earnings than DoubleDown Interactive. DoubleDown Interactive 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for DoubleDown Interactive and Red Rock Resorts, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DoubleDown Interactive	0	2	4	0	2.67
Red Rock Resorts	0	4	9	1	2.79

DoubleDown Interactive currently has a consensus target price of $18.60, suggesting a potential upside of 112.09%. Red Rock Resorts has a consensus target price of $65.08, suggesting a potential upside of 3.35%. Given DoubleDown Interactive’s higher probable upside, research analysts clearly believe DoubleDown Interactive is more favorable than Red Rock Resorts.

Insider & Institutional Ownership

47.8% of Red Rock Resorts shares are held by institutional investors. 53.8% of Red Rock Resorts shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
DoubleDown Interactive	32.94%	12.92%	11.89%
Red Rock Resorts	9.52%	59.86%	4.80%

Summary

Red Rock Resorts beats DoubleDown Interactive on 12 of the 15 factors compared between the two stocks.

About DoubleDown Interactive

DoubleDown Interactive Co., Ltd. engages in the development and publishing of casual games and mobile applications in South Korea. It publishes digital gaming content on mobile and web platforms. The company offers DoubleDown Casino, DoubleDown Classic, DoubleDown Fort Knox, and cash me out games, as well as sells in-game virtual chips. Its games are primarily distributed, marketed, and promoted through third party platform providers. The company was formerly known as The8Games Co., Ltd. and changed its name to DoubleDown Interactive Co., Ltd. in December 2019. The company was incorporated in 2008 and is headquartered in Seoul, South Korea. DoubleDown Interactive Co., Ltd. is a subsidiary of DoubleU Games Co., Ltd.

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.