Divergent perspectives on Las Vegas, both on and off the main boulevard, are presented by Caesars and Red Rock Resorts
In the vibrant city of Las Vegas, two gaming giants, Caesars Entertainment and Red Rock Resorts, are experiencing contrasting fortunes.
Caesars Entertainment, a prominent name on the Strip, saw its shares close down 2.0 percent on Wednesday, marking a 17 percent drop for the year. The company's Q2 2025 earnings for Las Vegas were down 8% year-over-year to $469 million, missing the consensus of $480 million. The decline is partly attributed to the absence of major entertainment acts and a return to more normal seasonal patterns [1].
In contrast, Red Rock Resorts is enjoying a remarkable year, with shares up nearly 30 percent. The company reported the highest revenue and adjusted earnings in its 49-year history in Q2 2025, with net revenue increasing 6.2% year-over-year to $526.3 million and net income rising to $108.3 million [3].
The difference in their performances can be largely attributed to their differing business models and market focus. Caesars Entertainment relies heavily on the tourist-driven Strip market, which saw a temporary decline due to fewer major entertainment events and seasonal factors. On the other hand, Red Rock Resorts targets the locals market, which has shown strong growth and resilience [1].
Red Rock's locals-focused strategy offers better value propositions such as accessible pricing, convenient locations, and personalized service, which appeal to both local and some out-of-town guests. This has resulted in record profitability and margin expansion for Red Rock, while Caesars is navigating a slower recovery phase [1].
Analysts are taking note of Red Rock's success, raising its share price target and encouraging its acquisition. Analyst Jonas, for instance, revised his price target for Red Rock Resorts, reflecting a 2% lower 2026 and 2027 adjusted earnings estimate that includes Las Vegas [1].
Caesars management, however, remains optimistic, noting a decline in Canadian visitors as a headwind but anticipating growth in the final three months of 2025 and the first half of 2026 due to increased convention bookings [1].
The Las Vegas Convention and Visitors Authority recently released visitation numbers showing a 11% decline in June, suggesting that the Strip summer slowdown may be weighing on stocks [2]. Analyst John DeCree with CBRE characterizes the second quarter as noisy, with a sharp slowdown in leisure demand in Las Vegas, numerous one-time headwinds in regionals, and momentum in digital [2].
Despite the current challenges, analyst Barry Jonas with Truist Securities remains buy-rated on Caesars Entertainment based on its digital segment, undemanding valuation, and growing free cash flow. Analyst David Katz with Jefferies Equity Research expects digital to reach the $500 million target and capital returns to be balanced by debt paydowns and buybacks through the back half of the year [1].
In a nutshell, Caesars faces short-term challenges due to Strip market softness but anticipates a rebound based on stronger group bookings and digital/regional growth. Red Rock Resorts, on the other hand, benefits from sustained demand and successful property investments tailored to local customers, driving superior recent financial performance and stock momentum [1][3].
[1] CNBC [2] Reuters [3] Yahoo Finance
In the contrasting financial landscapes, shares of Caesars Entertainment, a Strip mainstay in Las Vegas, have dropped by around 30%, while Red Rock Resorts' shares have surged nearly 30%. The divergent performance, rooted in their differing business models, has Red Rock Resorts, with its locals-focused strategy, posting record revenue and income for Q2 2025.
