Analysts are lowering their price targets for BetRivers parent Rush Street Interactive after its third quarter results showed slowing iGaming growth with similar trends in October.
This was the first time since Q1 2025 that RSI did not raise its guidance at the midpoint and its first revenue miss in four years, said Jordan Bender of Citizens. October’s results had CFO Kyle Sauers say full year revenue could hit the lower end of guidance while adjusted EBITDA should be around the midpoint.
RSI’s stock has tumbled since last Wednesday‘s call. Trading ended Friday with a 52-week closing low of $12.12, or down 19.9% since Wednesday’s pre-earnings close. The stock continued to fall in early trading Monday as the market reacts to the latest tax situation in Colombia, which led Ryan Sigdahl of Craig-Hallum to downgrade RSI to hold.
For weeks, analysts had been adjusting for softer third quarter results than expected, and RSI has felt that in its stock. Shares are down more than 40% since the start of October.
Updated targets for BetRivers parent
Bender dropped his target to $24 (-$10) but maintained his market outperform rating. His estimate changes are small, but the new valuation is based on 15 times its 2027 enterprise value/EBITDA, down from 22 times previously.
The stock has re-rated by more than 13 times in just a few months, he said, but RSI still deserves a premium multiple compared to peers based on its strong growth trajectory in Latin America, growing free cash flow, no debt and the fact that 75% of its revenue comes from online casino.
Jeff Stantial of Stifel dropped his target to $28 (-$2) but maintained his buy rating. He correctly called the stock sell off but suggested that is short sighted.
“While acknowledging limited visibility, we believe relative valuation following [trailing three month] underperformance discounts RSI’s resilient iCasino market share and structurally longer [total addressable market] runway in iCasino vs. OSB,” Stantial said.
Chad Beynon of Macquarie lowered his target to $26 (-$7) but maintained his outperform rating. He lowered estimates slightly but expects the company to reaccelerate growth in 2028 based on potential 2027 legislation that could open up new online casino jurisdictions for BetRivers.
New Colombia tax introduced
RSI has been dealing with a temporary 16% excise tax on gambling deposits in Colombia that was due to expire at the end of the year. On Thursday, though, the government filed a fiscal bill that includes a 19% tax on gambling deposits.
This is just the latest twist in tax uncertainty in Colombia. The temporary tax started in 2025 with a 19% tax on deposits from late February through the end of the year. That cost the company $25 million to $30 million in adjusted EBITDA at the time.
Stantial estimates that the 19% tax would have hurt EBITDA by $50 million to $65 million this year compared to the $50 million estimated impact from the 16% tax.
Stantial already factored the current 16% tax rate to continue into 2028, so the increase to 19% would present just “modest and potential mitigable downside” to consensus forecasts, he said.
Sigdahl sees RSI spending an additional $140 million on bonusing next year if the bill passes and estimates a $50 million or greater impact to adjusted EBITDA.
Details on downgrade
Sigdahl called the potentially permanent tax in the proposed Economic Rescue Plan a “devastating curveball” in his Monday note.
The downgrade came “out of an abundance of caution,” Sigdahl explained, since there is still work to be done to get the bill passed. He noted Brazil’s recent online gambling shutdown as a precedent for shaking up gambling in the region.
There are more than 100 proposed changes in the bill that could be changed or stripped, but Sigdahl believes the gambling tax will likely stay with both sides seemingly agreeing on the need to increase tax revenue from the industry.
“We think investors and some of our fellow sell-side analysts are underappreciating the likelihood and magnitude of impact, which leaves more room to disappoint expectations from here vs upside,” Sigdahl said.
