Rush Street Interactive (RSI): Exploring Valuation After Another Strong Quarter and Raised Guidance

Rush Street Interactive (NYSE:RSI) just announced its twelfth straight quarter surpassing both revenue and EBITDA forecasts. This performance was driven by strong user growth and new market entries across Latin America. The company also raised its full-year outlook.

See our latest analysis for Rush Street Interactive.

Shares of Rush Street Interactive have cooled off a bit in the last month, despite strong financial results and upbeat guidance. After surging earlier this year, the stock today trades at $17.23 and has delivered a standout one-year total shareholder return of 41.1% as well as an impressive 397% gain over three years. Momentum has slowed in recent weeks. However, the company’s steady growth and expansion efforts continue to support long-term optimism among investors.

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With shares recently pulling back despite upbeat results and higher guidance, investors are left to wonder whether Rush Street Interactive is undervalued at these levels or if the market has already priced in its promising growth trajectory.

Most Popular Narrative: 24.6% Undervalued

Rush Street Interactive’s most widely followed investment narrative calculates a fair value well above today’s closing price of $17.23. This signals a notable gap between where the market currently trades and what analysts believe the business is worth, pointing to potentially underappreciated growth drivers and future upside.

The digitalization of entertainment is accelerating migration from offline to online gaming. With record-high monthly active users (MAUs) growing over 30% in North America and more than 40% in Latin America, Rush Street Interactive is well-positioned to capture this expanding addressable market and support sustained future revenue growth.

Read the complete narrative.

Want to peek inside the math fueling this bullish fair value? The surprisingly ambitious growth forecasts and expanding margins underpin this narrative’s high confidence. Just wait until you see what’s assumed for profits and industry leadership; these projections may make you question if the consensus is missing something significant.

Result: Fair Value of $22.86 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks such as regulatory shifts in Latin America and rising marketing costs could challenge Rush Street Interactive’s growth assumptions and future earnings potential.

Find out about the key risks to this Rush Street Interactive narrative.

Another View: Earnings Multiple Raises a Red Flag

While Rush Street Interactive looks undervalued using the fair value approach, a closer look at its price-to-earnings ratio suggests caution. The company trades at 56.1 times earnings, which is sharply above both the US Hospitality industry average of 20.8 and a fair ratio of just 24.8. Such a premium means investors are paying well above what typical valuation models suggest, introducing more risk if lofty expectations are missed. Is the market too optimistic, or is growth truly that exceptional?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Rush Street Interactive Narrative

If you have a different perspective or enjoy diving into the numbers yourself, it only takes a few minutes to shape your own investment thesis. Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Rush Street Interactive.

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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.

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