What Happened?
Shares of online casino and sports betting company Rush Street Interactive (NYSE:RSI) jumped 17.6% in the pre-market session after the company reported a "beat and raise" quarter. Third-quarter results exceeded analysts' EPS and EBITDA expectations. Marketing efforts, including the decision to focus on high-value players, worked out as planned, as revenue grew 35% y/y while EBITDA rose more than fivefold over the same period. As a result, management was able to raise both full-year sales and EBITDA guidance. Zooming out, we think this was a solid quarter. After the initial pop the shares cooled down to $10.72, down 0.3% from previous close.
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What The Market Is Telling Us
Rush Street Interactive’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. But moves this big are rare even for Rush Street Interactive and indicate this news significantly impacted the market’s perception of the business. The biggest move we wrote about over the last year was 8 months ago when the stock gained 35.6% on the news that the company reported fourth-quarter results that blew past analysts' revenue, operating margin, and EPS expectations. This was driven by more monthly active users than expected in its U.S. and Canada geographies (160,000 vs. estimates of 151,000). Off the strength of this quarter, management shared encouraging full-year revenue guidance of $800 million, clearing Wall Street's projections of $759 million. Zooming out, this was a great quarter that shareholders will appreciate.
Rush Street Interactive is up 155% since the beginning of the year, and at $10.72 per share, it is trading close to its 52-week high of $11.41 from October 2024.
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