Red Rock Resorts (RRR) stock surged over 5% in pre-market trading on Wednesday, as the gaming and entertainment company reported record fourth-quarter results and received raised price targets from analysts, driven by its strong growth prospects in the Las Vegas locals market.

For Q4 2024, Red Rock achieved its highest-ever net revenue and adjusted EBITDA for its Las Vegas operations, benefiting from robust performance at the newly-opened Durango Casino Resort and continued strength in its Hotel and Food & Beverage segments. The company's expansion into the locals market has been well-received, with Durango signing up over 85,000 new customers.

However, the company's margins declined due to cannibalization from the Durango property, unfavorable sports betting hold, and higher labor costs. Despite these challenges, analysts remain optimistic about Red Rock's growth trajectory, with JMP Securities raising its price target to $59 and reiterating a Buy rating, citing the company's ability to capitalize on the booming Las Vegas market.