Rush Street Interactive (RSI) AI Stock Analysis

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Rush Street Interactive

(NYSE:RSI)

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Outperform 73 (OpenAI - 5.2)

Rating:73Outperform

Price Target:

$23.00

▲(11.11% Upside)

Action:ReiteratedDate:02/19/26

The score is driven primarily by strong financial improvement (profitability and cash flow strength with minimal leverage) and upbeat 2026 guidance. Offsetting factors are a mixed technical picture (negative MACD and trading below key mid-term averages) and a stretched valuation (high P/E with no dividend support).

Positive Factors

Strong cash generation and FCF

Sustained, large positive free cash flow indicates the business converts earnings into cash reliably, funding organic growth, content investment, buybacks and buffering regulatory shocks. Durable cash generation improves strategic optionality and lowers refinancing risk over the medium term.

Conservative balance sheet, minimal leverage

Essentially no debt and sizeable cash provide financial flexibility to enter new regulated markets, invest in product and weather policy/tax noise. Low leverage reduces interest burden and bankruptcy risk, supporting sustainable investment and competitive positioning over coming quarters.

Revenue scale and earnings turnaround

Material multi-year revenue growth with a return to consistent profitability shows product-market fit and operating leverage. Achieved margins and positive net income support reinvestment and validate unit economics, making the business more resilient to competitive and regulatory cycles.

Negative Factors

Colombia tax/regulatory uncertainty

A potential permanent 19% revenue tax or similar regulatory shifts in a key Latin American market materially affects net take rates and margins. Ongoing legal uncertainty complicates planning and could force sustained higher promotional spend to retain customers, pressuring long-term profitability.

Compression in player value (ARPMAU)

Declining ARPMAU reflects dilution from rapid new-user additions and elevated bonusing, which can lower long-term customer economics. If retention or monetization per user fails to recover, revenue growth may require disproportionately higher marketing, reducing durable margin expansion.

Planned higher marketing and G&A investment

Intent to materially raise marketing and G&A to support content, expansion and lobbying risks compressing operating leverage if returns lag. Elevated structural SG&A intensity can limit free cash flow improvement and makes margins more sensitive to slower-than-expected revenue execution.

Rush Street Interactive (RSI) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$4.81B

Dividend YieldN/A

Average Volume (3M)2.11M

Price to Earnings (P/E)55.9

Beta (1Y)0.97

Revenue Growth23.15%

EPS GrowthN/A

CountryUS

Employees883

SectorConsumer Cyclical

Sector Strength84

IndustryGambling, Resorts & Casinos

Share Statistics

EPS (TTM)0.08

Shares Outstanding103,175,026

10 Day Avg. Volume1,485,637

30 Day Avg. Volume2,109,550

Financial Highlights & Ratios

PEG Ratio0.05

Price to Book (P/B)12.65

Price to Sales (P/S)1.64

P/FCF Ratio11.34

Enterprise Value/Market Cap1.18

Enterprise Value/Revenue4.99

Enterprise Value/Gross Profit14.42

Enterprise Value/Ebitda43.69

Forecast

1Y Price Target

$24.33

Price Target Upside17.54% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering9

EPS Forecast (FY)0.54

Revenue Forecast (FY)$1.40B

Rush Street Interactive Business Overview & Revenue Model

Company DescriptionRush Street Interactive, Inc. operates as an online casino and sports betting company in the United States and 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.com, PlaySugarHouse.com, and RushBet.co brands. Rush Street Interactive, Inc. was founded in 2012 and is headquartered in Chicago, Illinois.

How the Company Makes MoneyRSI primarily makes money from real-money online gaming (iGaming) and online sports betting by earning net gaming revenue from customer wagering activity on its platforms, subject to gaming taxes and contractual revenue shares. (1) Online casino (iGaming) revenue: Customers wager on casino games (e.g., slots and table games). Over time, the statistical house advantage (the difference between amounts wagered and winnings paid out) generates gross gaming revenue; after deducting player incentives/bonuses, jackpot/other gaming-related costs, and where applicable payments to platform/content providers and other revenue-sharing counterparties, RSI retains net gaming revenue. (2) Online sports betting revenue: RSI takes bets across sporting events; revenue is driven by the sportsbook “hold” (handle minus payouts to winning bettors), adjusted for promotional credits and bonuses, and reduced by required gaming taxes and any third-party costs such as data, trading/risk services, payment processing, and market-access or revenue-share arrangements with land-based casinos or other local partners needed to operate in certain jurisdictions. (3) Market access, licensing, and partnerships: In many regulated U.S. states, online operators must partner with a local land-based casino, racetrack, or similar license holder; these arrangements can involve fixed fees and/or a percentage of gaming revenue, which affects RSI’s net revenue and margins but enables legal operation and market entry. (4) Other contributing factors: Revenue and profitability are influenced by customer acquisition and retention spending (including promotions and marketing), product mix (iGaming typically has different economics than sports betting), payment processing costs and chargebacks, regulatory gaming taxes, and the breadth of jurisdictions where RSI is licensed to operate.

Rush Street Interactive Key Performance Indicators (KPIs)

Any

Revenue by Geography

Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.

Chart InsightsRush Street Interactive's revenue growth in North America and Latin America is robust, with significant increases in both regions. The latest earnings call highlights a 30% rise in North American MAUs and 40% in Latin America, driven by strong online casino and sports betting performance. Despite challenges like VAT tax in Colombia, RSI's strategic expansions and raised revenue guidance underscore confidence in sustaining this growth trajectory. The company's focus on key markets and new launches, such as in Alberta, further bolsters its competitive edge and potential for continued success.

Data provided by:

The Fly

Rush Street Interactive Earnings Call Summary

Earnings Call Date:Feb 17, 2026

(Q4-2025)

% Change Since: |

Next Earnings Date:May 06, 2026

Earnings Call Sentiment Positive

The call presented a strongly positive operational and financial picture: record revenue, substantial adjusted EBITDA and net income growth, broad-based MAU expansion, improved operating leverage and a confident 2026 guidance range. The primary negatives are regulatory and tax-related uncertainty in Colombia (which materially affected 2025 via $75M of bonusing and is assumed conservatively in 2026 guidance), ARPMAU dilution from rapid new-user growth, and evolving competitive/regulatory dynamics around prediction markets. Overall, the positives (strong growth, profitability, cash generation and clear growth initiatives) materially outweigh the manageable but notable risks, leading to a constructive outlook.

Q4-2025 Updates

Positive Updates

Record Annual Financial Performance

Full year 2025 revenue of $1.13 billion, up 23% year-over-year, exceeding the high end of raised guidance; adjusted EBITDA of $153.7 million, up 66% YoY and above guidance; net income of $74 million vs $7.2 million in 2024.

Strong Fourth Quarter Results and Revenue Momentum

Q4 2025 revenue of $324.9 million, up 28% YoY, marking the 11th consecutive quarter of sequential revenue growth; Q4 adjusted EBITDA of $44.1 million, up 44% YoY and a new quarterly record.

Robust User Growth and Engagement

North America MAUs grew 37% YoY to over 278,000 in Q4; North American online casino MAUs grew 51% YoY in Q4; Latin America MAUs grew 47% YoY to over 493,000 in Q4, demonstrating broad-based user expansion.

Improving Operating Leverage and Margins

Full-year gross margin of 34.6% (Q4 34.4%) while marketing spend as a percentage of revenue declined ~290 basis points YoY; marketing was 14% of revenue (Q4 marketing $45.4 million, +5% YoY) and G&A improved to 7.1% of revenue for the year (down from 8.1%).

Successful Navigation and Market Share Gains in Colombia

Despite temporary VAT on deposits in 2025, company achieved Colombia GGR growth of 66% for the year and increased MAUs by 34% while strategically absorbing much of the tax impact via bonusing to preserve engagement and share.

Solid Balance Sheet and Cash Generation

Ended the year with $336 million in cash on hand and generated $142 million of cash during 2025 net of stock repurchases; $42 million remaining on the $50 million share repurchase program.

Confident 2026 Guidance and Growth Outlook

2026 guidance: revenue $1.375–1.425 billion (21%–26% YoY growth) and adjusted EBITDA $210–230 million (37%–50% YoY growth); management expects revenue and EBITDA cadence to improve through the year and modest gross margin improvement.

Product and Market Expansion Initiatives

Plans to increase investment in differentiated casino content; anticipated Alberta launch potentially late Q2/early Q3 2026; poker expansion—launched in 4 states with plans for a 5th—to enhance retention and cross-sell.

Negative Updates

Colombia VAT Deposit Tax Impacted 2025 Revenue and EBITDA

The temporary 2025 VAT on deposits led to approximately $75 million of incremental bonusing (direct revenue reduction) and an estimated $25–30 million EBITDA cost for the year.

Compression in Player Value (ARPMAU)

North America ARPMAU declined 5% YoY in Q4 due to dilution from rapid user additions; Latin America ARPMAU declined 21% YoY in Q4 largely driven by extra bonusing in Colombia.

Regulatory and Tax Uncertainty in Colombia for 2026

A new emergency decree implemented a 19% VAT on revenue for 2026 (assumed in guidance), though the Constitutional Court suspended the decree pending review—creating uncertainty; company expects at least January tax payment before suspension.

Assumed 19% Revenue Tax in 2026 Guidance Increases Risk

Guidance prudently assumes the 19% tax on revenue will be in place for full year 2026, which could materially affect profitability in the region if upheld (impact described as lower than 19% net due to variable costs but still meaningful).

Prediction Markets: Competitive and Regulatory Ambiguity

Prediction markets are an evolving competitive factor with active legal/regulatory developments (e.g., recent court rulings); while management is monitoring closely and not prioritizing it now, it represents an uncertain competitive landscape.

Planned Increase in Marketing and G&A Investment

Management expects meaningful increases in marketing spend in 2026 (though slower than revenue growth) and G&A to grow more closely with revenue as investments in content, lobbying and personnel accelerate—which could pressure near-term operating leverage if outcomes differ from plan.

Company Guidance

The company guided 2026 revenue to $1.375–$1.425 billion (up ~21%–26% YoY) and adjusted EBITDA to $210–$230 million (up ~37%–50% YoY), noting cadence should improve through the year; guidance assumes the new 19% Colombia tax on revenue is in place for the full year (the decree was suspended but January will be paid). Management framed the outlook off a 2025 base of $1.13 billion revenue (+23% YoY) and $153.7 million adjusted EBITDA (+66% YoY), Q4 revenue of $324.9 million (+28% YoY), FY gross margin ~34.6% (Q4 34.4%), cash of $336 million, $142 million cash generation in 2025 (net of repurchases), ~$42 million remaining on a $50 million buyback, Q4 marketing $45.4 million / FY marketing $158.4 million (~14% of revenue, down 290 bps YoY), and FY G&A $81 million (~7.1% of revenue); they expect modest gross margin improvement, meaningful (but revenue‑outpacing) increases in marketing, G&A to grow more in line with revenue, and did not include potential upside from an Alberta launch in the guidance.

Rush Street Interactive Financial Statement Overview

Summary

Strong multi-year turnaround with revenue scaling to $1.134B (2025), a return to profitability in 2024–2025, and robust cash generation (2025 operating cash flow ~$165M; free cash flow ~$164M). Balance sheet is low-risk with essentially no debt and improving equity, though margins remain relatively modest and prior-year volatility is a durability watch item.

Income Statement

Positive

Revenue has scaled materially from $278.5M (2020) to $1.134B (2025), with growth re-accelerating in 2025 (6.6% vs. near-flat in 2024). Profitability has improved sharply: the business moved from large operating losses in 2021–2023 to solid profitability in 2024–2025, with 2025 showing ~7.7% operating margin and ~2.9% net margin. Gross margin has been relatively steady in the low-to-mid 30% range, supporting the earnings turnaround. The main weakness is that net profitability remains modest for the industry and the company’s earnings power is still proving itself after several loss years.

Balance Sheet

Very Positive

The balance sheet looks conservatively positioned with essentially no leverage (total debt $0 in 2025; very low debt in prior years), which reduces financial risk and improves flexibility. Equity has expanded meaningfully (from ~$78.7M in 2024 to ~$147.2M in 2025), and 2025 profitability translated into a strong return on equity (~22.6%). The key watch-out is the historical volatility in equity (including negative equity in 2020) and that asset growth has been significant, so maintaining returns through the cycle remains important.

Cash Flow

Very Positive

Cash generation strengthened substantially: operating cash flow rose to ~$165.0M in 2025 from ~$106.4M in 2024, and free cash flow jumped to ~$164.2M (up ~64.5% in 2025). Cash conversion is very strong, with free cash flow nearly matching net income in 2025, indicating earnings are backed by cash. The primary weakness is historical volatility—cash flow was negative in 2021–2023—so durability across different operating environments remains the key risk.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.13B	924.08M	691.16M	592.21M	488.11M
Gross Profit	392.76M	322.05M	226.15M	177.55M	155.96M
EBITDA	127.39M	56.51M	-21.85M	-110.47M	-90.03M
Net Income	33.31M	2.39M	-18.30M	-38.63M	-29.06M
Balance Sheet
Total Assets	658.51M	379.47M	318.58M	350.35M	408.73M
Cash, Cash Equivalents and Short-Term Investments	340.50M	229.17M	168.33M	206.08M	281.03M
Total Debt	18.46M	4.64M	4.13M	1.90M	1.66M
Total Liabilities	355.02M	181.15M	152.45M	159.47M	101.03M
Stockholders Equity	147.24M	78.68M	53.77M	56.05M	85.44M
Cash Flow
Free Cash Flow	164.24M	77.02M	-37.12M	-88.62M	-82.94M
Operating Cash Flow	165.00M	106.45M	-5.93M	-60.32M	-48.19M
Investing Cash Flow	-37.02M	-33.36M	-33.78M	-28.99M	-37.00M
Financing Cash Flow	-37.36M	-2.65M	-518.00K	-1.22M	125.58M

Rush Street Interactive Technical Analysis

Technical Analysis Sentiment

Positive

Last Price20.70

Price Trends

50DMA

18.81

Positive

100DMA

18.58

Positive

200DMA

18.28

Positive

Market Momentum

MACD

0.62

Positive

RSI

59.40

Neutral

STOCH

49.98

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RSI, the sentiment is Positive. The current price of 20.7 is above the 20-day moving average (MA) of 20.23, above the 50-day MA of 18.81, and above the 200-day MA of 18.28, indicating a bullish trend. The MACD of 0.62 indicates Positive momentum. The RSI at 59.40 is Neutral, neither overbought nor oversold. The STOCH value of 49.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RSI.

Rush Street Interactive Risk Analysis

Rush Street Interactive disclosed 61 risk factors in its most recent earnings report. Rush Street Interactive reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Rush Street Interactive Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RSI	73 Outperform	$4.81B	55.90	27.50%	―	23.15%	―
SGHC	73 Outperform	$5.24B	17.39	30.38%	1.34%	29.54%	4389.69%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DKNG	61 Neutral	$20.97B	30.77	0.46%	―	18.51%	37.25%
CDRO	56 Neutral	$372.19M	―	23.16%	―	1.79%	―
BALY	43 Neutral	$591.91M	1.74	118.32%	―	0.36%	47.55%

* Consumer Cyclical Sector Average

Performance Comparison

RSI

Rush Street Interactive

20.70

9.74

88.87%

DKNG

DraftKings

23.67

-15.82

-40.06%

SGHC

Super Group (SGHC)

10.46

3.91

59.77%

CDRO

Codere Online

8.17

0.80

10.85%

BALY

Bally's Corporation

12.04

-6.21

-34.03%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Feb 19, 2026