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Tuesday, on the New York Stock Exchange, Benchmark analysts continued to endorse Rush Street Interactive (NYSE:RSI), currently trading at $11.67 with a market capitalization of $2.65 billion, with a strong vote of confidence. Analysts at Benchmark reiterated their Buy rating for the company’s stock, maintaining a price target of $14.00, while other analysts see potential upside with targets ranging up to $17.00. According to InvestingPro analysis, RSI’s financial health score is rated as GREAT, supported by strong fundamentals. The endorsement comes with expectations of a robust first quarter, driven by Rush Street Interactive’s solid performance and sustained growth within its iCasino-led product range.
Benchmark’s updated forecasts anticipate revenues of $254 million and an AEBITDA of $26 million. Although these projections fall slightly below the consensus expectations, Benchmark analysts see no significant risk to the company’s execution on these targets. The first quarter is seen as a promising kickoff to the fiscal year, even with the potential for sportsbook hold pressure stemming from March Madness events.
The company’s iCasino operations, which are projected to comprise nearly 70% of Rush Street Interactive’s Gross Gaming Revenue (GGR) for 2024, suggest a lower susceptibility to the weaker March sportsbook hold that has affected the broader industry. This strategic focus has contributed to impressive growth, with revenue increasing 33.7% over the last twelve months and the stock delivering an 85.4% return over the past year. The analysts believe that Rush Street Interactive’s diverse portfolio, high customer retention rates, and effective marketing strategies are key factors in driving margin growth and enhancing value for shareholders in the long term.
Rush Street Interactive’s strategic focus on iCasino, as opposed to sportsbook, appears to be a differentiator that shields the company from some of the volatility faced by its peers. This approach, coupled with the company’s scalable marketing initiatives, positions Rush Street Interactive favorably for future financial performance.
Benchmark’s analysis supports the view that Rush Street Interactive is on a trajectory for continued success, with a business model that is resilient in the face of industry fluctuations. The firm’s emphasis on iCasino over sportsbook is a strategic choice that could provide a stable foundation for sustained growth and profitability. Want deeper insights? InvestingPro subscribers get access to 13 additional exclusive ProTips and a comprehensive Pro Research Report that provides detailed analysis of RSI’s valuation, growth prospects, and financial health metrics.
In other recent news, Rush Street Interactive reported a strong financial performance for the fourth quarter of 2024, surpassing Wall Street expectations. The company achieved an earnings per share of $0.07, exceeding the forecasted $0.05, and reported a revenue of $254.2 million, which was higher than the anticipated $243.83 million. This marked a 31% increase in revenue year-over-year, contributing to a full-year revenue of $924.1 million, up 34% from the previous year. Additionally, Rush Street Interactive’s adjusted EBITDA for the fourth quarter increased significantly, up 2.5 times from the previous year.
Following the earnings announcement, Benchmark analysts raised their price target for Rush Street Interactive shares to $14, maintaining a Buy rating due to the company’s record-breaking quarter. Susquehanna analyst Joseph Stauff also upgraded the stock from Neutral to Positive, citing optimism about the company’s strategic value and potential growth, particularly in North America. Stauff set a price target of $14, attributing this to the company’s strong iCasino product and growth prospects in Delaware and other regions.
The company has shown resilience despite potential regulatory challenges, particularly in Colombia, and continues to focus on expanding its iCasino operations. Rush Street Interactive’s strategic initiatives and operational agility are expected to play a crucial role in navigating the evolving regulatory landscape and achieving future growth. As the company looks to 2025, it has provided revenue guidance of $1,010 million to $1,080 million and forecasts an adjusted EBITDA of $115 million to $135 million, reflecting continued confidence in its strategic direction.
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