Shareholders in Rush Street Interactive (NYSE:RSI) have lost 48%, as stock drops 10% this past week

Investors can approximate the average market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. That downside risk was realized by Rush Street Interactive, Inc. (NYSE:RSI) shareholders over the last year, as the share price declined 48%. That falls noticeably short of the market return of around 2.6%. Because Rush Street Interactive hasn't been listed for many years, the market is still learning about how the business performs. The share price has dropped 54% in three months.

Since Rush Street Interactive has shed US$68m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Rush Street Interactive

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

A Different Perspective

While Rush Street Interactive shareholders are down 48% for the year, the market itself is up 2.6%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Notably, the loss over the last year isn't as bad as the 54% drop in the last three months. So it seems like some holders have been dumping the stock of late - and that's not bullish. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Rush Street Interactive is showing 4 warning signs in our investment analysis , and 1 of those is a bit concerning...

Rush Street Interactive is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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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.