Rush Street Retrenchment a Buying Opportunity, Says Jefferies Analyst

Shares of Rush Street Interactive (NYSE: RSI), previously one of this year’s hottest gaming names, tumbled over the past month, but at least one analyst views the dip as a buying opportunity.

In a report to clients, David Katz of Jefferies notes that Rush Street’s iGaming-first model will continue bearing fruit due to “outsized growth” in the U.S. and Latin America. Chicago-based Rush Street Interactive does offer online sports betting (OSB), but its area of emphasis is internet casinos — a segment delivering growth in excess of sports wagering.

The analyst, who rates the stock a “buy” with a $39 price target, adds that Rush Street’s new customers in Mexico and Peru are tilting even more heavily toward online casinos.

Addressing Bearish Points on Rush Street

As Katz points out, two of investors’ primary concerns with Rush Street Interactive stock are planned spending on iGaming in Alberta, Canada and the specter of the World Cup leading to challenging year-over-year comparisons in 2027.

While Rush Street benefited from the World Cup, particularly on the Latin American sports betting front, Katz says management views the tournament as a customer acquisition event, “which fuels cross-selling growth through 2027.”

North of the border, Rush Street is planning to spend $7 million to $10 million to ramp up iGaming in Alberta, but those expenditures didn’t prevent the operator from again raising 2026 guidance last month. Rush Street solidifying its internet casino positioning in another Canadian province could be pivotal due to lack of clarity as to when more U.S. states will legalize that form of betting.

“Finally, slower-than-expected U.S. legalization should be noted, but the company continues to grow and expects to capture at least its share of US iGaming industry growth given the large customer base it has acquired. In total, the growth trajectory remains intact,” adds Katz.

LatAm a Key Growth Driver for Rush Street

Investors familiar with the stock know that Latin American is integral to the Rush Street story, confirming that the removal of a controversial value-added tax (VAT) in Colombia earlier this year is a catalyst for the shares. That country is one of the operator’s marquee ex-US markets and the elimination of the tax could provide a $50 million tailwind this year, according to Katz.

Katz also notes that if Rush Street goes shopping for deals, it’s likely to be in Canada or Latin America while potentially examining smaller, bolt-on technology-related acquisitions in the U.S. The operator is likely to eschew large-scale U.S. deal-making.