I can see the bull case for Rite Aid Corporation (NYSE:RAD) stock. There’s still a chance the company’s acquisition by Walgreens Boots Alliance Inc (NASDAQ:WBA) will go through. That deal would value RAD stock at $6.50 per share (at least), implying roughly 70% upside.

And with Walgreens having triggered a 60-day deadline for the FTC to review the deal, that 70% upside — or something close — could come in a matter of months. Add to that the fact that Rite Aid stock has some value even if the deal goes through. The combination potentially creates a “heads I win, tails I don’t lose much” scenario, particularly with RAD stock under $4.

The problem is that heads and tails, in this case, aren’t equally weighted. The Walgreens deal looks increasingly unlikely. Rite Aid itself is coming off a weak FY2017, where same-store revenue declined and profits fell further. There’s a chance this could work out for RAD stock holders, but it’s not likely. And, even with Rite Aid stock falling in trading Tuesday, the stock looks like a gamble at best.

Will the Walgreens Deal Go Through?

It’s increasingly clear the market believes the Walgreens-Rite Aid deal will be blocked. With RAD stock currently trading at approximately $3.67, the implied odds of a deal would be 59% if Rite Aid stock was worthless on its own. That’s obviously not the case. Assuming RAD stock is worth $2.25 on its own — a bearish scenario posited by Deutsche Bank AG (USA) (NYSE:DB) — the market is estimating a roughly 37% chance of success.

Even that might be high. News Tuesday that the FTC still is gathering information on the deal seems to conflict with Walgreens’ accelerated timeline. A weak performance from Fred’s, Inc. (NASDAQ:FRED), which will acquire up to 1,200 divested stores, raises questions about whether Fred’s can be the legitimate competitor the FTC would desire for Walgreens and CVS Health Corp (NYSE:CVS).

As Bloomberg pointed out, Dollar General Corp. (NYSE:DG) wound up having to step in to buy stores divested in the deal between Dollar Tree, Inc. (NASDAQ:DLTR) and Family Dollar Stores, Inc. (NYSE:FDO), after private equity fund Sycamore Partners couldn’t run those stores successfully.

To be sure, the market is guessing. The FTC generally is more lenient under Republican control, but there are only two commissioners in place, instead of the normal five. Antitrust regulation has generally been inconsistent. But, a buyout of Rite Aid stock by Walgreens seems unlikely at this point.

Can Rite Aid Stand Alone?

The problem is that RAD stock looks increasingly less valuable on its own. Q4 earnings last month beat expectations, but that doesn’t mean they were good. Rite Aid benefited from an extra week in the quarter, which helped a 4.3% increase in revenue. But, same-store sales were down 3%, including a 4.3% decline in pharmacy. Adding insult to injury, reimbursement rates dropped as well, leading Adjusted EBITDA to decline 31%.

There’s an obvious question as to whether Walgreens even wants Rite Aid at this point, given clear market share erosion in the key pharmacy business. For full-year FY17 (ending February), same-pharmacy revenue fell 3.2% and company-wide Adjusted EBITDA dropped 19%.

The FY17 performance means that Rite Aid stock almost certainly will decline if, and when, the deal officially falls through. At the moment, RAD stock still trades at almost 10x on an EV/EBITDA basis. Its leverage ratio (net debt to EBITDA) is more than 6x. That makes debt refinancing pretty much impossible — and Rite Aid burned about $200 milion in cash in FY17.

Again, RAD stock won’t go to zero if the deal falls through. But, an 8x EV/EBITDA multiple — hardly out of the question for a negative-growth, heavily-leveraged play — values the stock below $2. Normalized free cash flow of 10x (excluding inventory and accounts payable/receivable timing) would value Rite Aid stock around $2.50. Deutsche Bank’s $2.25 figure seems in the right ballpark. And if it is, RAD stock isn’t worth chasing, even below $4.

Rite Aid Stock Is a Gamble

Again, there is a bull case for RAD stock. But I don’t believe it’s a good case. Plain and simple, RAD stock is a gamble. If an investor believes there’s a 40% or better chance of the Walgreens deal going through, Rite Aid stock is a buy. If not, it’s an avoid – or a short, if an investor wants to bet against the deal closing.

But, there simply isn’t enough information to truly understand what the odds are. As such, I don’t see enough of an edge to chase RAD stock above $3. Buying Rite Aid stock, even at current levels, isn’t investing — it’s gambling. I think there are better bets elsewhere.

As of this writing, Vince Martin did not hold a position in any of the aforementioned securities.