Key Points
- Rush Street Interactive operates online sportsbooks and iGaming casinos as well as land-based sportsbooks and casino games under the BetRivers, PlaySugarHouse and RushBet brands.
- Rush Street expected adjusted EBITDA to grow over 300% in 2024.
- Bloomberg reported the company may be in talks to sell itself, with DraftKings being mentioned as a potential suitor.
- 5 stocks we like better than Rush Street Interactive
Rush Street Interactive Inc. NYSE: RSI provides and operates online sports betting and iGaming platforms as well as land-based casino sportsbooks at retail locations in the United States. The company also provides social gaming, which includes its online casino and sportsbook, to social media sites.
Shares recently spiked on speculation of multiple bidders vying to acquire the company. This consumer discretionary sector is rumored to be exploring a potential sale of the company, and DraftKings Inc. NASDAQ: DKNG was tossed around as a possible suitor.
Rush Street is Building a Growing Mini Empire
Rush Street has a rare combination of both digital and physical casinos and sportsbooks in operation. They operate under several brands, including BetRivers.com, RushBet and PlaySugarHouse.com. Their land-based casinos currently operate in four states, and sports betting is live in 15 states in the United States. The company also has an international footprint that includes Mexico, Columbia, and Ontario, Canada.
Is Rush Street for Sale?
According to Bloomberg, there is speculation that Rush Street is exploring strategic initiatives, including the potential for a sale. The rumor caused shares to spike 13% intraday, triggering a volatility stock halt on March 21, 2024. DraftKings was one of the potential rumored suitors, according to unnamed sources.
The Company Posted a Strong Q4 2023
Rush Street reported fiscal Q4 2024 EPS of a penny, beating consensus analyst estimates for a loss of 4 cents by 5 cents. Fourth-quarter and full-year net losses were $5.5 million and $60.1 million, respectively. Adjusted EBITDA was $11.5 million in Q4. Monthly active users (MAUs) in the United States and Canada rose 7% YoY to 160,000. MAUs in Latin America, including Mexico, rose 33% YoY to 204,000.
ARPMAU in Latin America was $42. Revenues grew 17.4% YoY to $194 million, beating consensus analyst expectations by$15.04 million. Full year 2023 revenues rose 17% to $691 million. The average revenue per monthly active user (ARPMAU) was $345 in Q4 2023 and was up by 5% YoY. The company closed the year with $168 million in unrestricted cash.
Rush Street launched an exclusive Online Casino and Sportsbook operations in Delaware on December 27, 2023.
Bullish Full Year 2024 Guidance
Rush Street expects full-year 2024 revenues to come in between $770 million to $830 million. The midpoint of $800 million represents 16% YoY growth compared to $691 million revenues for the full year 2023. Full year 2024 adjusted EBITDA guidance is expected between $35 million to $45 million. At mid-range of $40 million, it represents a 390% YoY growth compared to adjusted EBITDA of $8.2 million in 2023.
CEO Insights
Rush Street Interactive CEO Rick Schwartz noted that higher user counts in the United States and Canada are driving increased revenues as they grow player values. The company achieved its highest YoY MAU growth in the last 4 quarters at 7%, which was balanced between its sportsbook and iCasino. Michigan had strong acceleration revenue, with Q4 having its highest growth rate over the past year. New Jersey is seeing solid progress as it hits new revenue highs since it rebranded BetRivers in Q3 2022. Ontario, Canada, is generating 50% YoY growth. West Virginia had 80% YoY growth. Delaware has only been live for 2 months but has already generated a $60 million run rate during its first 60 days.
North America Legislative Outlook
Schwartz commented on the North American legislative outlook, "While we are not laying off the legislative outcomes, some of the states that we are watching include New York, Maryland, Illinois, as well as provinces in Canada, most notably Alberta. As we look ahead, these, along with exciting growth initiatives I've mentioned regarding Latin America have us very excited about the future. There is no shortage of near and long-term opportunities in our universe." Schwartz believes expansion in a casino is a question of when, not if. Given the beneficial economics to government budgets compared to inflows from online sports betting. Check out the sector heatmap on MarketBeat.
Rush Street Interactive analyst ratings and price targets are at MarketBeat. Rush Street Interactive peers and competitor stocks can be found with the MarketBeat stock screener.
Daily Ascending Triangle Pattern
The daily candlestick chart for RSI illustrates the ascending triangle pattern. The ascending trendline formed at $4.99 on January 23, 2024. The flat-top upper trendline resistance formed at $5.97. RSI initially attempted to breakout on its Q4 2023 earnings release as shares gapped up to $7.31 but settled back down into the triangle range around $5.67. The breakout occurred again on a spike through $5.97 that gained momentum on the rumor of a potential sale to DKNG. The daily relative strength index (RSI) is rising towards the 70-band. Pullback support levels are at $5.97, $5.47, $4.99 and $4.46.
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