A Look at Rush Street Interactive’s (RSI) Valuation After Strong Q3 Revenue Growth and Ten Consecutive Quarters of Gains

Rush Street Interactive (RSI) delivered an impressive third quarter update, reporting a 20% increase in revenue compared to last year. The company also topped expectations and marked its tenth straight quarter of sequential growth.

See our latest analysis for Rush Street Interactive.

Following RSI’s upbeat third quarter, the stock is building momentum again, with a 1-day share price gain of just over 3% and a year-to-date rise of 34%. While recent volatility saw some pullback last quarter, RSI’s three-year total shareholder return stands out at 402%. This reflects both long-term growth and renewed confidence after the latest results.

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With growth exceeding expectations and shares trading below analyst targets, the question is whether Rush Street Interactive is an overlooked bargain or if the market has already considered all of its future potential.

Most Popular Narrative: 19.3% Undervalued

Rush Street Interactive’s most popular narrative points to a fair value well ahead of its recent closing price. This suggests the market may not fully appreciate its upside potential. In the context of stable analyst expectations and a tightening discount rate, future earnings growth is the major focus for this estimate.

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, which may support sustained future revenue growth.

Read the complete narrative.

Want to discover why this price target is so ambitious? This narrative rests on key assumptions about user growth, digital platforms, and expanding profit margins. What projections are driving analysts to bold conclusions about the next phase for Rush Street Interactive? Dive deeper to unlock the surprising figures behind this fair value calculation.

Result: Fair Value of $22.86 (UNDERVALUED)

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

However, potential regulatory changes or slower user growth in key markets could quickly challenge this bullish outlook and shift expectations for Rush Street Interactive.

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

Another View: What Does the Market Multiple Say?

While our earlier fair value projection is optimistic, the current market valuation using the price-to-earnings ratio paints a less flattering picture. RSI trades at 60 times earnings, almost triple the US Hospitality industry's typical 21.4x and well above the fair ratio of 24.9x. This steep gap highlights significant valuation risk, raising the question of whether investors could be overestimating future growth.

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

Build Your Own Rush Street Interactive Narrative

If you find the story above does not match your own outlook, take the opportunity to review the numbers firsthand and shape your own perspective in just a few minutes with 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.