RSI Inventory Able to Be Huge iGaming Winner, Says Jefferies Analyst
Posted on: April 16, 2021, 12:10h.
Final up to date on: April 16, 2021, 12:10h.
Rush Avenue Interactive (NYSE:RSI) inventory is poised to snap out of its post-merger hunch and ship upside for traders by the use of its enviable technological capabilities.
These are the feelings of Jefferies analyst David Katz, who initiates protection of the net on line casino operator with a “purchase” and a value goal of $21. That means upside of roughly 50 % from the April 15 shut. That’s on the increased finish of value forecasts on the newly public firm.
Our constructive view of RSI is pushed by its distinctive attributes within the context of the broadly nascent digital market,” mentioned Katz in a be aware to purchasers. “A pivotal Avenue debate is over the worth of an owned/proprietary tech stack; we’re convicted it gives strategic and financial profit, as evidenced by proprietary product and revenue.”
That’s welcome commentary for cautious Rush Avenue Interactive traders. The iGaming operator has been a standalone publicly traded entity for lower than 4 months following a merger with a particular objective acquisition firm (SPAC) and the shares are struggling. 12 months-to-date, RSI inventory is decrease by nearly 34 % and it resides 46.59 % beneath its pre-merger highs.
For RSI Inventory, Tech Is Distinction Maker
Because the web casinos trade takes off within the US, traders and operators are seeing the worth in vertical integration — an organization’s potential to supply back-end assist and expertise choices from inside somewhat than counting on third-party distributors.
The mannequin can permit for higher margins and superior backside line enlargement. It’s additionally more and more widespread within the on-line gaming and sports activities betting industries. Along with Rush Avenue Interactive, Bally’s and DraftKings are notable examples of operators pursuing vertical integration.
“RSI is among the many few US iGaming corporations with a vertically built-in expertise stack, the place its proprietary back-end iGaming platform permits it to extra rapidly enter new states and customise wagering choices and consumer experiences,” in line with Singular Analysis.
Katz, the Jefferies analyst, sees benefits for RSI by means of land-based casinos by way of the corporate’s ties to Wager Rivers dad or mum Rush Avenue in addition to social gaming offering “crucial pre-market momentum.”
Sturdy iGaming Positioning
Sports activities betting is getting loads of press, however trade insiders see on-line casinos as an actual driving drive of subsequent era gaming and Wall Avenue agrees.
Final month, Goldman Sachs mentioned on-line casinos within the US in the present day characterize a $1.5 billion market. However that may surge to $14 billion in 2033 whereas delivering a compound annual development fee (CAGR) of 27 % for greater than a decade.
Ought to these forecasts show correct, it may very well be a boon for RSI inventory because of the operator’s enviable market share.
“RSI maintains a #1 market share place within the US iCasino trade and the #3 or #4 place in sports activities betting for many states,” in line with Singular.
The analysis agency additionally views RSI as a possible takeover goal for a European operator seeking to achieve a stronger foothold within the US market.