RSI Stock Forecast & Price Target

Rush Street Interactive Inc. reported a significant increase in gross gaming revenue (GGR) in states with regulated online casinos, reaching $877.6 million, which reflects a 28% year-over-year growth and a 5% increase sequentially. Additionally, the company has seen robust customer growth in North America, with major states like Michigan, Pennsylvania, and New Jersey reporting growth rates between 22% and 31% year-over-year, while smaller markets are achieving even higher gains. Furthermore, the acceleration of monthly active users (MAUs) is notable, with a 30% increase in North America and a substantial 40% growth in Latin America, indicating a promising trajectory for future revenue generation.

Rush Street Interactive faces significant challenges reflected in the negative trends regarding its market share, which have been assessed as worse than expected. The company's marketing expenditure has decreased to under 14% of revenue, the lowest since its public debut, and while it has resulted in record first-time depositors, it nonetheless indicates an adverse $25–30 million headwind to Adjusted EBITDA. Additionally, the imposition of a 19% temporary VAT on deposits in Colombia is anticipated to further contribute an equivalent $25–30 million EBITDA headwind in 2025, compounding concerns about the company's future profitability.