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Ron Baron Still Bullish on Red Rock Stock, Sell-Side Concurs

By jili tutorial · September 12, 2026

Ron Baron Still Bullish on Red Rock Stock: A Comprehensive Investment Guide

Overview: Red Rock Resorts Under Pressure, but Long-Term Optimism Prevails

Red Rock Resorts (NASDAQ: RRR) has faced headwinds in 2025, with its stock declining roughly 10% year-to-date. The primary drag is construction-related disruption at several of its Las Vegas Valley casinos, including the Durango Casino & Resort in Southwest Las Vegas, Green Valley Ranch, and Sunset Station. Yet, despite these short-term challenges, prominent investors and sell-side analysts remain enthusiastic about the company’s prospects. This guide dives deep into the bull case for Red Rock Resorts, examines the temporary impact of construction, and explains why both buy-side and sell-side experts believe the stock is attractively valued.

Ron Baron’s Bullish Case for Red Rock Resorts

The Baron Capital Perspective

Ron Baron, founder of Baron Capital and manager of the Baron First Principles ETF (NYSE: RONB), is one of the most vocal supporters of Red Rock Resorts. In a recent commentary to investors, Baron highlighted the company’s sturdy balance sheet and argued that the current stock price undervalues its long-term potential.

“The company’s balance sheet remains strong with increased liquidity for further capital investment and shareholder returns,” wrote Baron. “We believe the stock remains attractive compared to what we believe the business can become in time.”

Red Rock stock accounts for 2.61% of the RONB portfolio, making it the ETF’s tenth-largest holding. The fund, which debuted in December 2024, currently has $489.62 million in assets under management. Notably, Red Rock is the only gaming stock in RONB, though another Baron ETF holds shares of Wynn Resorts (NASDAQ: WYNN).

Why a Strong Balance Sheet Matters

A robust balance sheet gives Red Rock the financial flexibility to invest in property upgrades while simultaneously returning capital to shareholders through dividends or buybacks. In the context of construction disruptions, this liquidity acts as a cushion, allowing the company to continue operations without straining its finances. For investors, a company with low debt and ample cash is better positioned to weather temporary earnings dips—and to emerge stronger once the improvements are complete.

The Specific Projects Causing the Dip

The stock’s year-to-date underperformance can be traced directly to construction activity at three key properties:

These projects have caused some disruption to normal operations, modestly denting second-quarter financial results. However, management and analysts view these efforts as “near-term pain, long-term gain.” The improvements are designed to enhance the customer experience, increase capacity, and ultimately drive higher revenue and cash flow.

Second Quarter Improvement Signals a Turnaround

According to Ron Baron, by the second quarter of 2025, “construction disruption dissipated and investors looked ahead to the benefits of the company’s recent investments in its resorts.” This shift in sentiment is expected to translate into:

In other words, the worst of the disruption appears to be behind the company. Once the renovations are fully complete, Red Rock should benefit from a more modern and appealing casino portfolio, likely capturing a larger share of the growing Las Vegas locals market.

The Sell-Side Perspective: Analyst Initiation and Outlook

David Bain’s Bullish Thesis

Sell-side analysts are also lining up in favor of Red Rock. Earlier this week, Texas Capital analyst David Bain initiated coverage with a “buy” rating and a $72 price target, implying potential upside of nearly 33% from current levels. His bullish case rests on several pillars:

1. The Booming Las Vegas Locals Market

The Las Vegas locals market—casinos serving residents rather than tourists—is experiencing rapid population growth. As more people move to the area, the demand for gaming, dining, and entertainment within the valley expands. Red Rock, as a dominant operator in this niche, is well-positioned to benefit.

“Red Rock is garnering more of the locals segment’s wallet share due to a willingness to invest in its properties while commanding strong return on investment from those expenditures,” Bain noted.

2. A Substantial Land Bank and High Returns on Investment

Red Rock owns a ~442-acre Nevada land bank, which provides a long-term growth pipeline. The company historically achieves 20%+ internal rate of return (IRR) on greenfield projects—that is, new builds from the ground up. For context, IRR is a metric that estimates the profitability of potential investments. A 20%+ IRR means that for every dollar spent on a new casino, the project is expected to generate an annual return of at least 20% over its life.

3. Near-Term Catalyst: Next Project Announcement

Bain anticipates Red Rock’s next project announcement by the first half of 2027, which he views as “another relatively near-term stock catalyst.” This timeline reinforces the idea that the company has a clear, unmatched pipeline of growth opportunities beyond the current renovation cycle.

Investment Context: Baron Capital and the RONB ETF

Why Red Rock Stands Out in Baron’s Portfolio

Red Rock is a concentrated holding within the Baron First Principles ETF, representing over 2.6% of the fund’s assets. This suggests a high conviction bet on the company’s long-term success. The ETF’s focus on “first principles”—investing in businesses with durable competitive advantages—aligns with Red Rock’s strengths: a strong balance sheet, a dominant local market position, and a disciplined capital allocation strategy.

Wynn Resorts as a Companion Holding

While RONB does not hold any other gaming stocks, another Baron ETF includes Wynn Resorts. Wynn serves the high-end Strip and international luxury segment, complementing Red Rock’s locals-focused approach. Together, the two holdings give Baron Capital exposure to different ends of the Las Vegas gaming spectrum.

Key Takeaways for Investors

Red Rock Resorts offers a classic “temporary pain for permanent gain” narrative. For investors with a multi-year horizon, the current dip may represent an attractive entry point before the benefits of recent investments fully materialize.