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Rush Street Interactive, Light & Wonder, and XLMedia have emerged as the top performing gambling stocks in February, each showing strong performance within their respective categories.

Rush Street Interactive

In the operator category, Rush Street Interactive (RSI) emerged as a standout performer, achieving a share gain of 12.28%.

The month saw a steady rise for RSI, with shares starting at $5.21 on 31 January and closing at $5.85. 

Moreover, over the trailing 12 months the stock had already exhibited solid gains of 39.62%.

While February proved uneventful for the company, March brought positive news as RSI reported a 17.1% year-on-year revenue increase, reaching $193.9m in Q4 2023. 

This surge in revenue translated to adjusted EBITDA of $11.5m, a significant improvement from the adjusted EBITDA loss of $17.3m in the same period the previous year.

The positive results were attributed to a rise in monthly active users, increased average spending, and reduced expenses on advertising and promotions.

Upon reviewing the Q4 results, Macquarie analyst Chad Beynon assessed the business and expressed optimism about RSI’s growth prospects.

Beynon highlighted potential growth drivers such as developments in Delaware, new iGaming legalisation in states like New York, Maryland, Illinois, and Alberta, and expansion opportunities in Latin America, where RSI “is the number-two operator in Colombia with a complete localised solution.”

In Delaware, after just two months of operating, “RSI is already run-rating $60m of OSB/iGaming GGR, well above our initial estimate,” Beynon stated. 

Beynon revised the revenue estimates for 2024 and 2025 upwards to $787m and $830m, respectively, from $698m and $785m, reflecting current trends and guidance. 

Additionally, Macquarie introduced a 2026 revenue estimate of $946m and raised its target price by 33% to $8, from $6. 

Light & Wonder

In February, Light & Wonder emerged as the biggest winner among the suppliers on NEXT.io‘s watchlist.

The company’s stock value surged 25.04%, reaching $100.51 on 29 February.

The stock experienced a significant uptick towards the end of the month, coinciding with Light & Wonder’s report of a 13% year-on-year revenue increase to $770m in Q4 2023.

Overall, the business declared adjusted EBITDA of $302m, up 14% compared to the $265m generated in Q4 2022.

Net income for Q4 2023 stood at $67m, more than tripling the $21m net income reported in Q4 2022.

Looking at the full-year 2023, Light & Wonder recorded a total revenue of $2.9bn, marking a substantial 15.5% year-on-year increase. 

Adjusted EBITDA for the year reached $1.12bn, up by 22.5% from $914m in 2022.

Light & Wonder president and CEO Matt Wilson described 2023 as “a banner year” for the company. 

“Our businesses achieved double-digit growth across the board, fueled by strategic investments and strong execution. We consistently leverage a differentiated product strategy and plan to capitalise on the significant growth opportunities ahead of us,” he added.

Additionally, Light & Wonder made headlines at the beginning of the month with its strategic investment in no-code automation platform Flows.

XLMedia

In the affiliate segment, XLMedia concluded the month on a positive note with share price gains of 6.87%.

The company’s shares opened at 6.55p and closed at 7p on 29 February.

XLMedia kicked off the month with a newly forged commercial partnership with the Star Tribune Media Company, the largest news organisation in the US Upper Midwest.

This strategic collaboration is part of XLMedia’s ongoing efforts to enhance its presence in the US market, aiming to overcome previous challenges and solidify its position in the industry.

Investors reacted positively to the news as the company’s shares traded 13% higher.

However, just one day later XLMedia warned of a 32% year-on-year revenue decrease to approximately $50m for full-year 2023, which sent its share price back down again.

EBITDA of $12m would also represent a year-on-year decline of around 28%.

Nonetheless, for 2024 XLMedia anticipates a promising opportunity following the launch of regulated sports betting in North Carolina yesterday (11 March).

Additionally, the company foresees an uptick in online sports betting legalisation post the upcoming US presidential election, with ongoing initiatives in five states. 

In Europe, XLMedia aims to expand its brands in 2024 while implementing cost-saving measures to align with anticipated market growth in 2025.

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