What happened?
Shares of online casino and sports betting company Rush Street Interactive (NYSE:RSI) fell 9.1% in the afternoon session after the company reported third-quarter revenue below analyst estimates and left its full-year revenue outlook unchanged. According to a company press release, Rush Street Interactive reported revenue of $385.9 million, up 39% from $277.9 million and below the consensus estimate of $390.78 million. Adjusted earnings per share was 15 cents, above the consensus estimate of 14 cents. Net income rose 93% to $28.7 million, and adjusted EBITDA rose 73% to $62.2 million. Monthly active users rose 42% to 907,881. The company reiterated full-year 2026 revenue guidance of $1.56 billion to $1.60 billion, compared with a consensus estimate of $1.58 billion, and adjusted EBITDA guidance of $245 million to $265 million.
The shares closed the day at $13.60, down 10.1% from the previous close.
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What is the market telling us
Rush Street Interactive's shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 15.1% on the news that the company reported strong second-quarter results that beat expectations and raised its full-year guidance, prompting a "sell the news" reaction from investors possibly concerned about the stock's valuation. The online gaming company's revenue grew 46.3% year on year to $393.8 million, handily beating Wall Street's estimates. Additionally, Rush Street lifted its full-year revenue guidance to $1.58 billion, which was also ahead of expectations. Despite the strong operational performance, the stock's valuation may have given investors pause. The company's price-to-earnings ratio of over 42x suggested that a significant amount of good news was already priced into the stock, potentially leading some shareholders to take profits after an initial post-earnings pop the prior day.
Rush Street Interactive is down 29.4% since the beginning of the year, and at $13.63 per share, it is trading 60.5% below its 52-week high of $34.52 from July 2026. Investors who bought $1,000 worth of Rush Street Interactive's shares 5 years ago would now be looking at only $677.10.
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