Rush Street Interactive (RSI) is in focus after its BetRivers online casino and sportsbook launched in Alberta, extending the company’s presence in Canada and opening another regulated market for its real money gaming platform.

At a share price of $33.65, Rush Street Interactive has pulled back slightly in the last session. However, the 30-day share price return of 15.68% and 90-day share price return of 45.61% point to building momentum, while a 1-year total shareholder return of 129.85% and a very large 3-year total shareholder return underline how strongly the stock has rewarded investors over time.

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Rush Street Interactive now looks like a stronger business, with fresh traction in Alberta and solid recent returns. The question is whether those strengths are already fully reflected in a US$33.65 share price, or if there is still a margin of safety.

Most Popular Narrative: 3.7% Overvalued

With Rush Street Interactive closing at $33.65 against a most followed fair value estimate of $32.45, the narrative points to a modest premium that hinges on growth, margins and future earnings assumptions.

The analysts have a consensus price target of $32.45 for Rush Street Interactive based on their expectations of its future earnings growth, profit margins and other risk factors.

However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $38.0, and the most bearish reporting a price target of just $30.0.

Want to see what sits behind that tight range of targets? The narrative focuses on revenue expansion, rising profitability and a richer earnings multiple that are incorporated into the fair value.

Result: Fair Value of $32.45 (OVERVALUED)

However, investors still need to weigh risks such as higher gaming taxes in key markets and rising marketing spend that could put additional pressure on Rush Street Interactive’s margins.

Another View on Rush Street Interactive’s Value

While the most followed fair value narrative suggests Rush Street Interactive is trading at a modest premium, the SWS DCF model points in a different direction. On this view, RSI at $33.65 sits about 4.8% below an estimated future cash flow value of $35.36. This raises a simple question: which story do you trust more, the earnings multiple or the cash flows?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Rush Street Interactive for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 50 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

The article presents a positive perspective on Rush Street Interactive, so if it has your attention, consider acting promptly and compare the information with your own expectations using the 3 key rewards.

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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.