At US$6.42, Is Rush Street Interactive, Inc. (NYSE:RSI) Worth Looking At Closely?

Rush Street Interactive, Inc. (NYSE:RSI), is not the largest company out there, but it saw a significant share price rise of 27% in the past couple of months on the NYSE. While good news for shareholders, the company has traded much higher in the past year. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Rush Street Interactive’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Rush Street Interactive

What's The Opportunity In Rush Street Interactive?

Great news for investors – Rush Street Interactive is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $9.02, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Rush Street Interactive’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Rush Street Interactive?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a negative profit growth of -12% expected next year, near-term growth certainly doesn’t appear to be a driver for a buy decision for Rush Street Interactive. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although RSI is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to RSI, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on RSI for a while, but hesitant on making the leap, we recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about Rush Street Interactive as a business, it's important to be aware of any risks it's facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Rush Street Interactive.

If you are no longer interested in Rush Street Interactive, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.