Value
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 0.4 |
| P/S | 6.3 |
| EV/EBITDA | 0.2 |
| Fwd P/E | 2.9 |
| PEG | 9.7 |
| Analyst target | 4.0 |
- ▸Forward P/E: 37.3x
- ▸PEG: 0.56
RSI · Why this verdict
Why Rush Street Interactive (RSI) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Rush Street Interactive is a high-growth online gaming company with 41% year-over-year revenue growth, industry-leading returns on equity, and exceptional free cash flow conversion, but trading at overbought levels with the price above analyst targets and a put-to-call ratio of 2.0 signaling elevated bearish hedging.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue grew 41% year over year, making the company an industry growth leader in online gambling, supported by expanding state-by-state legalization tailwinds and an average earnings surprise of approximately 24.8% across the last two reported beats. Growth breakdown | Revenue growth rate remains above 25% year over year over the next 12 months, sustaining the company's leading growth profile within the gambling industry. | →Stable |
| CounterHigh revenue growth in online gambling is partly driven by market expansion into newly legalized states, which is a one-time unlock that slows materially once the addressable market matures, making the current growth rate likely unsustainable. | ||
Free cash flow conversion runs at 310% of net income, and return on equity is 35%, indicating the company is generating substantial cash relative to reported earnings and deploying capital at attractive rates. Quality breakdown | Free cash flow as a percentage of net income remains above 200% and return on equity stays above 20% over the next 12 months. | →Stable |
| CounterThe wide gap between free cash flow and reported net income in an early-stage growth company may partly reflect timing of customer acquisition spend and working capital changes that do not persist at this rate as growth normalizes. | ||
The stock has an RSI reading of 76 indicating overbought conditions, and the current price of $30.12 already exceeds the analyst consensus take-profit target of $29.54, leaving negative 1.9% upside to consensus. Price targets | Price corrects to below $28, providing a better entry point that restores a positive risk/reward ratio relative to analyst targets. | ↑Improving |
| CounterOverbought conditions in high-growth stocks can persist far longer than fundamental analysis suggests, particularly when momentum is strong and the growth story remains intact, which could keep the stock elevated despite the stretched valuation. | ||
The put-to-call ratio of 2.00 and implied volatility of 113% indicate that options market participants are heavily positioned for downside, representing a significant warning signal even as price momentum appears strong. Options | Put-to-call ratio falls below 1.5 within 6 months as bearish hedging demand eases and investor confidence in the growth thesis improves. | ↑Improving |
| CounterA put-to-call ratio of 2.0 in a stock at 52-week highs may reflect sophisticated hedging by holders rather than directional bearishness, and high implied volatility creates time decay that erodes option premiums regardless of price direction. | ||
Revenue grew 41% year over year, making the company an industry growth leader in online gambling, supported by expanding state-by-state legalization tailwinds and an average earnings surprise of approximately 24.8% across the last two reported beats.
→StableGrowth breakdown
- Expectation
- Revenue growth rate remains above 25% year over year over the next 12 months, sustaining the company's leading growth profile within the gambling industry.
CounterHigh revenue growth in online gambling is partly driven by market expansion into newly legalized states, which is a one-time unlock that slows materially once the addressable market matures, making the current growth rate likely unsustainable.
Free cash flow conversion runs at 310% of net income, and return on equity is 35%, indicating the company is generating substantial cash relative to reported earnings and deploying capital at attractive rates.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income remains above 200% and return on equity stays above 20% over the next 12 months.
CounterThe wide gap between free cash flow and reported net income in an early-stage growth company may partly reflect timing of customer acquisition spend and working capital changes that do not persist at this rate as growth normalizes.
The stock has an RSI reading of 76 indicating overbought conditions, and the current price of $30.12 already exceeds the analyst consensus take-profit target of $29.54, leaving negative 1.9% upside to consensus.
↑ImprovingPrice targets
- Expectation
- Price corrects to below $28, providing a better entry point that restores a positive risk/reward ratio relative to analyst targets.
CounterOverbought conditions in high-growth stocks can persist far longer than fundamental analysis suggests, particularly when momentum is strong and the growth story remains intact, which could keep the stock elevated despite the stretched valuation.
The put-to-call ratio of 2.00 and implied volatility of 113% indicate that options market participants are heavily positioned for downside, representing a significant warning signal even as price momentum appears strong.
↑ImprovingOptions
- Expectation
- Put-to-call ratio falls below 1.5 within 6 months as bearish hedging demand eases and investor confidence in the growth thesis improves.
CounterA put-to-call ratio of 2.0 in a stock at 52-week highs may reflect sophisticated hedging by holders rather than directional bearishness, and high implied volatility creates time decay that erodes option premiums regardless of price direction.
Per-dimension breakdown
Quality
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 9.0 |
| Gross margin | 3.0 |
| Op margin | 4.6 |
| Net margin | 1.5 |
| Current ratio | 6.9 |
| FCF quality | 10.0 |
| Moat | 7.5 |
| Piotroski F | 10.0 |
- ▸Excellent ROE: 35%
- ▸Excellent cash conversion: 310% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 41% YoY
Momentum
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 2.9 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.8 |
| Analyst rating | 8.3 |
| Price target | 5.9 |
- ▸LLM news sentiment: +0.55 (n=3)
Insider
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Heavy insider selling — $308,922,360 (4.259% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.4 |
| quality rank | 5.0 |
| growth rank | 8.8 |
- ▸Industry growth leader
- ▸Conservative debt levels
Technical
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.9 |
| support resistance | 5.9 |
| 52w position | 8.2 |
Risk (lower is worse)
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.5 |
| days to cover | 7.5 |
| volatility | 2.1 |
| put call | 0.0 |
| implied vol | 1.9 |
| beta | 4.8 |
| debt equity | 9.9 |
- ▸Elevated put/call: 2.00
- ▸High IV: 68%
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 7.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 5 days
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier +1 (HOLD_IF_HOLDING → STRONG_BUY_WAIT).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=+1|ENTRY_STICKY:WITHIN_BANDPassed (4)
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.70
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (4)
- MOMENTUM:3.1<4.5
- ASYMMETRY:-0.9=NEGATIVE
- INSIDER:4.26%=EXTREME
- EARNINGS_PROXIMITY:5d<=7d
Warning (0)
none
Reward-to-Risk
-0.92
Upside
-7.6%
Downside
8.3%
Sizing output
STARTER
SetupRange Bound — RSI 46 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.56>1.3
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: 8K:CLEAN. Top dim: Growth at 10.0; weakest: Momentum at 3.1. No conviction either direction.
The strongest dimensions are Growth at 10.0, Sentiment at 7.4, and Technical at 7.0; the weakest are Momentum at 3.1, Value at 4.2, and Risk (lower is worse) at 4.4. The V9 engine flagged 4 failed gates, producing an asymmetric reward-to-risk of -0.92 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P141 Percent Revenue Growth Rate
Trip ifRevenue growth rate falls below 15% year over year for at least 2 consecutive quarters, indicating a more than 50% deceleration from the current 41% pace.
- P2Excellent Cash Conversion Quality
Trip ifFree cash flow as a percentage of net income falls below 100%, more than 200 percentage points below the current 310% level.
- P3Overbought Valuation At Target
Trip ifPrice rises above $35, more than 16% above the current $30.12, pushing the stock further above analyst consensus targets without a corresponding upward revision in estimates.
- P4Elevated Put Call Bearish Positioning
Trip ifPut-to-call ratio rises above 2.5, exceeding the current already-elevated 2.0 level, indicating further acceleration in bearish hedging demand.