Rush Street Interactive Soars Following Conference Comments

Posted on: January 17, 2024, 03:08h. 

Last updated on: January 18, 2024, 12:19h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Rush Street Interactive (NYSE: RSI) was among Tuesday’s best-performing gaming equities. That’s after executives from the online sportsbook operator provided the investment community with a bullish update at Needham’s Growth Conference.

Rush Street Interactive
A Rush Street Interactive advertisement. The stock surged Wednesday following bullish comments by the operator at an industry conference. (Image: X)

CEO Richard Schwartz and CFO Kyle Sauers participated in the event. Commentary from the Rush Street executives propelled upside in the stock, with the shares higher by 12.63% in late trading Wednesday on volume that was more than double the daily average.

The executives told conference attendees about the momentum accrued by the gaming company in the third quarter, which followed into October and then into December. One catalyst contributing to higher hold for the operator was efficient bettor access to play proposition wagers. The operator’s constructive commentary on the fourth-quarter hold arrived amid expectations that some rivals may have suffered lower-than-expected holds in the last three months of 2023.

Chicago-based Rush Street Interactive, which operates online and retail sportsbooks under the BetRivers and PlaySugarHouse brands, previously noted its Prop Central offering presents bettors with a more expansive, functional avenue for pregame and live proper wagers across multiple sports.

Other Catalysts for Rush Street Interactive

At the Needham conference, Rush Street Interactive executives added that the company’s recent debut as the Delaware Lottery’s iGaming partner is off to a solid start, and expects to accrue benefits from its Latin America exposure.

RSI operates under the BetRivers and PlaySugarHouse brands, and is currently available with mobile or retail businesses in Colorado, Illinois, Indiana, Iowa, Michigan, New Jersey, New York, Pennsylvania, Virginia, and West Virginia.

The gaming company is also operational in Colombia, Mexico, and Peru, among other Latin American economies. That could be beneficial, as Brazil mulls which sportsbook firms should receive licenses there. Brazil, the region’s largest economy, is widely viewed as Latin America’s “golden goose” of sports wagering.

The combined population in Latin American countries where sports betting is regulated is 365 million. By some estimates, the total addressable market for regional operators is $3 billion or more.

Some Bullish Analyst Talk on RSI

Needham analyst Bernie McTernan maintained a “buy” rating on Rush Street Interactive with a $6 price target, which implies upside of 33% from where the stock trades at this writing. That projection is based on a 2025 enterprise value/earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) forecast of 10x to 15x and approximately 1.6x this year’s sales estimate.

McTernan added that the operator’s ongoing emphasis on iGaming provides some buffer against new entrants in the sports wagering field, such as ESPN Bet and Fanatics.

Nine analysts cover Rush Street Interactive, with eight rating the stock “strong buy” or “buy.” The consensus price target on the shares is $6.44.