Friday - Needham has increased its price target for Rush Street Interactive (NYSE:RSI) shares to $10 from the previous $9, while maintaining a Buy rating.
The adjustment follows a fireside chat at the Needham TMT Conference, where Rush Street Interactive's CEO Richard Schwartz and CFO Kyle Sauers discussed the company's performance and strategy.
On Friday, the firm highlighted Rush Street Interactive's strong business momentum, which is expected to lead to accelerated revenue growth in 2024.
This growth is anticipated to stem from the company's core North American operations, the recent expansion into Delaware, and robust growth in Latin America.
The emphasis during the fireside chat was on the company's focus on iGaming, which has been identified as a competitive advantage and a key factor in their recent consumer and technology successes.
The company has also made significant progress in improving its customer acquisition strategies, resulting in a 50% year-over-year reduction in customer acquisition costs (CAC).
This improvement has been a critical aspect of Rush Street Interactive's strategy, as it seeks to strengthen its market position and financial performance.
Further optimism for Rush Street Interactive's outlook is driven by its expansion in Latin America, with new market launches in countries like Brazil and Peru expected to provide additional growth opportunities. These developments are seen as potential sources of upside to the firm's estimates over the next few years.
In conclusion, Needham's revised price target of $10 reflects a stronger conviction in Rush Street Interactive's future performance, following the insights gained from the company's executive discussion at the conference.
InvestingPro Insights
Following the positive outlook presented by Needham, a closer examination of Rush Street Interactive's financials and market performance via InvestingPro reveals additional insights. The company's market capitalization stands at a robust $1.94 billion, indicating strong investor confidence. Although the P/E ratio is currently negative at -52.79, reflecting challenges in profitability, there is a significant revenue growth of over 20% in the last twelve months, underscoring the company's expanding business operations.
InvestingPro Tips suggest that while Rush Street Interactive is not profitable over the last twelve months, analysts predict the company will be profitable this year, which aligns with Needham's optimistic revenue growth projections. Additionally, the stock's substantial return of 176.04% over the past year, combined with a price that's at 96.32% of its 52-week high, illustrates a strong market performance that could interest potential investors.
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