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Rush Street Interactive (RSI)
NYSE:RSI
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Rush Street Interactive
(NYSE:RSI)
Rating:71Outperform
Price Target:
$13.00
▲( 9.89% Upside)
Positive Factors
Earnings
1Q revenue and adjusted EBITDA came in above expectations.
Market Potential
RSI is viewed as the best 'call option' on potential new state legalization in New York, Illinois, and Maryland.
Market Strategy
RSI's diversified vertical base, strong retention, and scalable marketing strategy continue to support margin expansion and long-term shareholder value creation.
Negative Factors
Market Competition
RSI faces headwinds in its Latin American segment due to higher VAT in Colombia and increased competition in North America.
Regulatory Challenges
The Colombian government enacted a 19% VAT on online gambling deposits, which could impact RSI's revenue and AEBITDA if upheld.
Rush Street Interactive (RSI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.71B
Dividend YieldN/A
Average Volume (3M)1.29M
Price to Earnings (P/E)152.8
Beta (1Y)1.49
Revenue Growth29.86%
EPS GrowthN/A
CountryUS
Employees883
SectorConsumer Cyclical
Sector Strength74
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)0.09
Shares Outstanding95,616,490
10 Day Avg. Volume1,121,550
30 Day Avg. Volume1,286,493
Financial Highlights & Ratios
PEG Ratio0.54
Price to Book (P/B)13.64
Price to Sales (P/S)0.00
P/FCF Ratio33.15
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.67Price Target Upside32.46% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
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 generates revenue primarily through its online casino gaming and sports betting operations. The company earns money by offering a wide variety of betting options, including casino games like slots and table games, as well as sports betting on numerous sports events. Players place bets, and RSI earns a percentage of these wagers, known as the 'hold.' Additionally, RSI capitalizes on social gaming, where users can purchase virtual currency to enhance their gaming experience. Key partnerships with land-based casinos and technology providers also support RSI's revenue model by expanding its market reach and enhancing its technological capabilities. Furthermore, RSI leverages marketing agreements and brand partnerships to increase its visibility and attract new customers, contributing to its revenue growth.
Rush Street Interactive Financial Statement Overview
Summary
Rush Street Interactive demonstrates a strong recovery with significant revenue growth and improved profitability metrics. The stable balance sheet with no debt and strong cash flow generation provides a solid foundation for future growth. However, low equity relative to liabilities poses risks during downturns.Income Statement
Rush Street Interactive has shown impressive revenue growth, with a significant increase from $691 million in 2023 to $924 million in 2024, marking a healthy growth trajectory. The gross profit margin improved to 34.8% in 2024 from 32.7% in 2023, indicating enhanced operational efficiency. The company turned profitable in 2024 with a net profit margin of 0.8%, showcasing a turnaround from previous losses. Although EBIT and EBITDA margins improved, they remain modest at 2.6% and 7.7% respectively, suggesting room for further profitability enhancements.75
Positive
Balance Sheet
The company's balance sheet is stable with a strong equity position, as evidenced by an equity ratio of 20.7% in 2024, up from 16.9% in 2023. The absence of debt indicates no leverage risk, although it limits opportunities for leveraging growth. Return on Equity improved to 9.2% in 2024 from a negative position in the previous year, reflecting improving profitability. However, the relatively low stockholders' equity compared to total liabilities suggests potential vulnerability to financial fluctuations.65
Positive
Cash Flow
Rush Street Interactive's cash flow statement is robust, with a significant turnaround in free cash flow from negative $37 million in 2023 to positive $105 million in 2024, indicating strong cash generation. The operating cash flow to net income ratio stands at 14.7, reflecting efficient conversion of net income to cash. The free cash flow to net income ratio is exceptionally high at 14.6, signifying excellent cash management and operational efficiency.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 969.06M | 924.08M | 691.16M | 592.21M | 488.11M | 278.50M | Gross Profit |
| 333.11M | 322.05M | 226.15M | 177.55M | 155.96M | 87.63M | EBIT |
| 38.65M | 24.31M | -51.61M | -124.80M | -94.28M | -133.42M | EBITDA |
| 74.00M | 56.51M | -21.85M | -109.86M | -90.03M | -126.30M | Net Income Common Stockholders |
| 8.43M | 2.39M | -18.30M | -134.33M | -71.09M | -138.81M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 228.22M | 229.17M | 170.98M | 179.72M | 281.03M | 255.62M | Total Assets |
| 387.02M | 379.47M | 318.58M | 350.35M | 408.73M | 308.56M | Total Debt |
| 0.00 | 4.64M | 1.29M | 1.90M | 1.66M | 1.21M | Net Debt |
| -222.18M | -224.53M | -167.04M | -177.82M | -279.37M | -254.42M | Total Liabilities |
| 191.66M | 181.15M | 152.45M | 159.47M | 101.03M | 405.78M | Stockholders Equity |
| 81.31M | 78.68M | 53.77M | 56.05M | 85.44M | -22.47M |
| Cash Flow | Free Cash Flow | ||||
| 81.69M | 77.02M | -37.12M | -88.62M | -82.94M | 9.94M | Operating Cash Flow |
| 104.25M | 106.45M | -5.93M | -60.32M | -48.19M | 16.18M | Investing Cash Flow |
| -33.50M | -33.36M | -33.78M | -28.99M | -37.00M | -6.24M | Financing Cash Flow |
| -29.65M | -2.65M | -518.00K | -1.22M | 125.58M | 241.07M |
Rush Street Interactive Technical Analysis
Negative
11.83
Price Trends
11.51
Positive
12.61
Negative
11.89
Negative
Market Momentum
0.08
Positive
49.28
Neutral
17.81
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RSI, the sentiment is Negative. The current price of 11.83 is below the 20-day moving average (MA) of 11.96, above the 50-day MA of 11.51, and below the 200-day MA of 11.89, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 49.28 is Neutral, neither overbought nor oversold. The STOCH value of 17.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RSI.
Rush Street Interactive Risk Analysis
Rush Street Interactive disclosed 62 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 2 New Risks
1.
The success of our online poker offerings depends largely upon maintaining sufficient player liquidity. Q4, 2024
2.
Emerging technologies, such as blockchain and cryptocurrency, may disrupt traditional gaming models and create new competitive threats for us. Q4, 2024
Rush Street Interactive Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $4.22B | 30.42 | 21.19% | 3.45% | 22.80% | 281.38% | |
73 Outperform | $7.26B | 23.02 | 46.19% | ― | 7.26% | 54.83% | |
71 Outperform | $2.71B | 152.84 | 11.87% | ― | 29.86% | ― | |
62 Neutral | $6.84B | 11.22 | 2.83% | 3.95% | 2.65% | -21.93% | |
59 Neutral | $5.76B | ― | -5.56% | ― | -1.25% | -130.83% | |
58 Neutral | $31.20B | ― | -46.78% | ― | 22.86% | 30.40% | |
48 Neutral | $2.27B | ― | -2.81% | ― | 5.51% | 92.46% |
* Consumer Cyclical Sector Average
Performance Comparison
RSI
Rush Street Interactive
11.83
3.03
34.43%
PENN
Penn National Gaming
15.08
-0.02
-0.13%
LNW
Light & Wonder
86.01
-9.36
-9.81%
CZR
Caesars Entertainment
27.69
-5.57
-16.75%
DKNG
DraftKings
35.08
-1.53
-4.18%
SGHC
Super Group (SGHC)
8.41
4.89
138.92%
Rush Street Interactive Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: -2.47%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant revenue growth, both domestically and internationally, with strong performance in key markets such as Michigan and Delaware. Adjusted EBITDA nearly doubled, and there was effective marketing spend. There were positive legislative developments, but the VAT tax in Colombia posed challenges, affecting net revenue. Overall, the positive aspects significantly outweigh the negatives.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
First quarter revenue was $262 million, up 21% year-over-year, driven by growth of 25% in online casino and 11% in sports betting.
Record Adjusted EBITDA
Adjusted EBITDA was $33 million, almost double compared to the same period last year.
North American Market Expansion
Year-over-year revenue growth in 15 out of 16 North American online markets, with Michigan showing 40% growth and Delaware exceeding 80% growth.
International Market Success
Mexico saw year-over-year growth near 50%, and Colombia's GGR was up 55% despite the VAT tax.
Increased Marketing Efficiency
Marketing spend increased by only 3% year-over-year while achieving leverage over marketing spend, reducing it to 15% of revenue compared to 17% last year.
Positive Legislative Developments
Progress in Alberta's online gaming legislation and Pennsylvania joining the multistate Internet gaming agreement.
Negative Updates
Impact of Colombian VAT Tax
Colombia's net revenue was negatively impacted by higher bonusing to absorb the 19% VAT tax, with March net revenue slightly down and April flat year-over-year.
Company Guidance
During the Rush Street Interactive first quarter 2025 earnings call, the company provided robust guidance reflecting strong performance and strategic growth. The first quarter revenue reached $262 million, marking a 21% increase year-over-year, while adjusted EBITDA rose to $33 million, nearly doubling from the previous year. The company's online casino vertical grew by 25%, and sports betting increased by 11%, despite challenges such as player-friendly outcomes during March Madness and the Philadelphia Eagles' Super Bowl win. North American monthly active users (MAUs) grew by 17%, and Latin America saw a 61% increase in MAUs. The company reiterated its full-year 2025 revenue guidance, projecting between $1.010 billion and $1.080 billion, with an anticipated adjusted EBITDA between $115 million and $135 million, representing a 13% and 35% increase respectively. These metrics highlight Rush Street Interactive's strategic focus on innovation, player acquisition, and retention, as well as the company's adaptability in navigating market challenges, such as the temporary VAT tax in Colombia.Rush Street Interactive Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Rush Street Interactive Expands Board with New Appointments
Positive
Mar 21, 2025
On March 19, 2025, Rush Street Interactive expanded its board of directors from nine to eleven members, appointing Jack Markell and Andrew Bluhm as new directors. Markell, a former Governor of Delaware and U.S. Ambassador, brings extensive experience in government and corporate development, while Bluhm, a finance and investment expert, has a background in private equity and real estate. These appointments are expected to strengthen RSI’s strategic direction as it continues to expand its presence across the Americas.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.