• For investors wondering if Rush Street Interactive at around US$27.86 still offers value, or if most of the easy gains are already behind it, this article focuses squarely on what the current price might be implying.
• The stock has had very strong returns recently, with about 25.9% over the last 30 days, 44.3% year to date and 137.9% over the past year, while the last week showed a small 0.4% decline.
• These moves are set against a backdrop of ongoing industry interest in online gaming and digital betting regulation across several regions. This can influence sentiment toward companies in this space. Broader discussions about competition, marketing spend and user growth for online betting platforms also shape how investors currently think about Rush Street Interactive.
• Right now, the stock scores 2 out of 6 on Simply Wall St's valuation checks, as shown in the valuation score. The next sections will walk through the main valuation methods behind that figure and then finish with a more holistic way to think about what the market might be pricing in.

Rush Street Interactive scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Rush Street Interactive Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes the cash Rush Street Interactive is expected to generate in the future and discounts those projections back to what they might be worth today.

For Rush Street Interactive, the latest twelve month Free Cash Flow is $113.5 million. Analysts have provided explicit forecasts out to 2028, with Simply Wall St then extrapolating further projections out to 2035. Within that path, projected Free Cash Flow reaches $300.8 million in 2028 and, based on the ten year schedule provided, continues to be modeled higher through 2035.

Bringing all those projected cash flows back to today using a 2 Stage Free Cash Flow to Equity model results in an estimated intrinsic value of about $35.21 per share. Against a current share price of roughly $27.86, the DCF output suggests the stock trades at about a 20.9% discount to this estimate, which points to Rush Street Interactive being undervalued on this approach.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Rush Street Interactive is undervalued by 20.9%. Track this in your watchlist or portfolio, or discover 44 more high quality undervalued stocks.

Approach 2: Rush Street Interactive Price vs Earnings

For profitable companies, the P/E ratio is a useful way to relate what you are paying for the stock to the earnings it is currently generating. It helps you see how many dollars of share price correspond to one dollar of earnings.

What counts as a "normal" or "fair" P/E depends on how the market views a company’s growth prospects and risk. Higher growth or lower perceived risk can justify a higher multiple, while slower growth or higher risk usually points to a lower multiple.

Rush Street Interactive currently trades on a P/E of 78.03x. This sits well above the Hospitality industry average of 20.58x and also above the peer group average of 25.26x, so on simple comparisons the stock looks expensive.

Simply Wall St’s Fair Ratio is designed to refine that view. It estimates what P/E might be reasonable for Rush Street Interactive after considering factors like its earnings growth profile, profit margins, industry, market cap and company specific risks. That makes it more tailored than a straight comparison with peers or the broad industry.

Rush Street Interactive’s Fair Ratio is 40.26x, which is clearly below the current P/E of 78.03x, suggesting the stock looks expensive on this basis.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Rush Street Interactive Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives bring this to life by letting you attach a clear story about Rush Street Interactive, such as whether you think it aligns more with the bullish US$30 or bearish US$18 analyst fair values, to your own forecast for future revenue, earnings and margins. You can then connect that story to an explicit fair value, see it side by side with the current share price so you can judge whether the stock looks expensive or cheap to you, and then watch that view update automatically on Simply Wall St’s Community page as new news, guidance or earnings arrive. This makes it easier to see why different investors can look at the same stock and reach very different conclusions.

For Rush Street Interactive, here are previews of two leading Rush Street Interactive narratives:

Fair value in this bullish narrative: US$29.00

Implied valuation gap vs last close: about 3.9% undervalued

Revenue growth assumption: 19.0%

• Assumes online gaming and betting expansion, supported by proprietary technology and efficient marketing, translates into higher user engagement and improving margins over time.
• Builds in analyst expectations for revenue growth around 19.0% a year, rising profit margins toward 6.2% and earnings of US$130.5 million by about May 2029.
• Aligns with an analyst consensus fair value of US$29.00, with the view that the current share price sits slightly below this level, while still leaving room for regulatory, tax and execution risks.

Fair value in this bearish narrative: US$18.00

Implied valuation gap vs last close: about 54.7% overvalued

Revenue growth assumption: 13.5%

• Highlights concerns that rising competition, ongoing reinvestment needs and maturing markets in North America could restrain margin expansion despite user growth.
• Builds a slower path with revenue growth around 13.5% a year, profit margins drifting to about 2.5% and earnings of roughly US$38.3 million by 2028, paired with a high P/E multiple of 64.9x.
• Anchors on a bearish fair value of US$18.00, which sits well below the current share price and reflects higher weight on regulatory, tax and competitive pressures in both North and Latin America.

If you want to see these narratives in full and weigh the bullish and bearish cases side by side, including the underlying earnings, margin and valuation paths, See what the community is saying about Rush Street Interactive.

Do you think there's more to the story for Rush Street Interactive? Head over to our Community to see what others are saying!

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.