Yep, that rear sprocket looks worn for sure. I'm guess you're gonna need to replace the whole kitten kaboodle (front sprocket, rear sprocket, and chain). My rear sprocket looked similar to yours when I changed my sprockets and replaced the chain this past winter. Oh, and if you do change everything, you might want to have a left side gasket on hand in case you can't salvage the old one. I had to wait a couple extra days cause I didn't have one ahead of time. Then had to get to town and get one from the dealership. Oops!