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Penn National Gaming (PENN)
NASDAQ:PENN
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Penn National Gaming
(NASDAQ:PENN)48Neutral
Positive Factors
IGaming Strategies
PENN has new assets opening which likely drive estimate revisions, focusing on innovative iGaming app strategies.
Share Buybacks
Management appears to be focused on cash flow and buybacks, with confidence around restarting share buybacks.
Negative Factors
ESPN Bet Challenges
The interactive guide negatively impacts the view that PENN will be able to create shareholder value through ESPN Bet.
Interactive Segment Losses
Lower than expected guidance for 2025 with deeper than expected losses at interactive.
Penn National Gaming (PENN) vs. S&P 500 (SPY)
Market Cap
$3.02B
Dividend YieldN/A
Average Volume (3M)4.07M
Price to Earnings (P/E)―
Beta (1Y)1.65
Revenue Growth3.38%
EPS Growth38.18%
CountryUS
Employees23,333
SectorConsumer Cyclical
Sector Strength53
IndustryHotels, Lodging & Leisure
Share Statistics
EPS (TTM)-2.05
Shares Outstanding152,947,370
10 Day Avg. Volume4,653,696
30 Day Avg. Volume4,070,246
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.50
Price to Cash Flow (P/CF)4.50
P/FCF Ratio76.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$23.88Price Target Upside18.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Penn National Gaming Business Overview & Revenue Model
Company DescriptionPenn National Gaming, Inc. owns and manages gaming and racing facilities and video gaming terminal operations with a focus on slot machine entertainment. It operates through the following business segments: Northeast, South, West and Midwest.. The Northeast segment consists of the following properties: Hollywood Casino at Charles Town Races, Hollywood Casino Bangor, Hollywood Casino at Penn National Race Course, Hollywood Casino Toledo, Hollywood Casino Columbus, Hollywood Gaming at Dayton Raceway, Hollywood Gaming at Mahoning Valley Race Course, and Plain ridge Park Casino. The South and West segment comprises of the following properties: Zia Park Casino, Hollywood Casino Tunica, Hollywood Casino Gulf Coast, Boomtown Biloxi, M Resort, Tropicana Las Vegas, 1st Jackpot and Resorts. The Midwest segment controls the following properties: Hollywood Casino Aurora, Hollywood Casino Joliet, Argosy Casino Alton, Argosy Casino Riverside, Hollywood Casino Lawrenceburg, Hollywood Casino St. Louis, and Prairie State Gaming. The company was founded in 1982 and is headquartered in Wyomissing, PA.
How the Company Makes MoneyPenn National Gaming generates revenue through its diverse portfolio of gaming and entertainment operations. The company's key revenue streams include its land-based casino operations, which offer slot machines, table games, and other gambling activities. Additionally, PENN has established a significant presence in the sports betting and iGaming sectors through its Barstool Sportsbook and interactive gaming platforms. Revenue is also derived from food and beverage sales, hotel accommodations, and entertainment services at its facilities. Strategic partnerships, such as those with Barstool Sports, enhance its brand visibility and customer reach, contributing to its earnings. The company's revenue model capitalizes on regulatory developments and the expansion of legalized sports betting across the United States.
Penn National Gaming Financial Statement Overview
Summary
Penn National Gaming faces challenges across its financial statements, with declining profitability, high leverage, and cash flow struggles. Despite revenue growth over the longer term, recent financial performance has been weak, with significant losses impacting overall stability and financial health.Income Statement
Penn National Gaming has experienced volatile profitability, with a significant net loss in 2024. Revenue growth has been inconsistent, decreasing in the most recent year. Gross profit margins have fluctuated, and the company's EBIT and EBITDA margins have declined, indicating pressure on operating efficiency and earnings quality.45
Neutral
Balance Sheet
The company's balance sheet shows high leverage, with a debt-to-equity ratio indicating significant reliance on debt financing. Although stockholders' equity has decreased, the equity ratio remains moderate. The high level of debt poses potential risks, but the company maintains substantial asset backing.50
Neutral
Cash Flow
Free cash flow turned negative in 2024, reflecting challenges in generating cash after capital expenditures. The operating cash flow to net income ratio is positive, but heavily impacted by net losses, indicating operational cash generation capability. The downturn in free cash flow highlights potential liquidity concerns.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 6.58B | 6.36B | 6.40B | 5.91B | 3.58B | Gross Profit |
| 6.58B | 1.93B | 2.77B | 2.76B | 1.71B | EBIT |
| 72.50M | 363.60M | 974.00M | 1.06B | 333.60M | EBITDA |
| 562.80M | 400.20M | 1.63B | 1.45B | 196.90M | Net Income Common Stockholders |
| -311.50M | -490.00M | 222.10M | 420.80M | -669.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 706.60M | 1.07B | 1.62B | 1.86B | 1.85B | Total Assets |
| 15.26B | 16.06B | 17.50B | 16.87B | 14.67B | Total Debt |
| 8.47B | 11.54B | 12.91B | 11.61B | 11.16B | Net Debt |
| 7.77B | 10.47B | 11.28B | 9.74B | 9.30B | Total Liabilities |
| 12.40B | 12.86B | 13.91B | 12.78B | 12.01B | Stockholders Equity |
| 2.86B | 3.20B | 3.60B | 4.10B | 2.66B |
| Cash Flow | Free Cash Flow | |||
| -123.40M | 74.00M | 605.80M | 627.80M | 197.00M | Operating Cash Flow |
| 359.30M | 455.90M | 878.20M | 896.10M | 338.80M | Investing Cash Flow |
| -541.20M | -742.60M | -258.60M | -1.22B | -233.70M | Financing Cash Flow |
| -186.50M | -262.60M | -853.00M | 339.90M | 1.31B |
Penn National Gaming Technical Analysis
Negative
20.09
Price Trends
20.25
Negative
20.10
Negative
19.30
Positive
Market Momentum
-0.07
Positive
44.30
Neutral
38.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PENN, the sentiment is Negative. The current price of 20.09 is below the 20-day moving average (MA) of 21.21, below the 50-day MA of 20.25, and above the 200-day MA of 19.30, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 44.30 is Neutral, neither overbought nor oversold. The STOCH value of 38.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PENN.
Penn National Gaming Risk Analysis
Penn National Gaming disclosed 42 risk factors in its most recent earnings report. Penn National Gaming reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Penn National Gaming Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $6.22B | 12.01 | 36.54% | 0.91% | 5.13% | 2.04% | |
73 Outperform | $32.52B | 23.15 | 50.14% | 1.88% | 8.93% | 22.50% | |
71 Outperform | $9.27B | 20.01 | -51.73% | 1.15% | 9.13% | -30.00% | |
65 Neutral | $9.31B | 13.73 | 21.76% | ― | 6.66% | -24.59% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
49 Neutral | $6.52B | ― | -6.38% | ― | -2.45% | -135.17% | |
48 Neutral | $3.02B | ― | -10.88% | ― | 3.38% | 38.18% |
* Consumer Cyclical Sector Average
Performance Comparison
PENN
Penn National Gaming
20.09
2.38
13.44%
BYD
Boyd Gaming
73.30
10.95
17.56%
LVS
Las Vegas Sands
46.05
-3.56
-7.18%
MGM
MGM Resorts
32.83
-9.20
-21.89%
WYNN
Wynn Resorts
90.67
-7.35
-7.50%
CZR
Caesars Entertainment
30.37
-10.62
-25.91%
Penn National Gaming Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -1.57% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call highlighted several positive developments, including strong retail performance, successful digital initiatives, and strategic growth projects. However, challenges remain in the interactive segment with significant EBITDA losses and ESPN BET underperformance. Weather and competitive supply also pose hurdles. Overall, the sentiment is slightly positive due to the proactive measures and growth outlook.Highlights
Share Repurchase Announcement
PENN Entertainment announced their intention to repurchase at least $350 million of shares of common stock in 2025, indicating confidence in their business outlook.
Retail Revenue and EBITDA Outperformance
For the fourth quarter of 2024, PENN reported retail revenue of $1.4 billion and adjusted EBITDA of $461 million, both slightly above the high end of their guidance.
Digital Segment Growth
The digital database grew to over 4 million members, and PENN anticipates a year-over-year EBITDA improvement of $350 million in the digital segment for 2025.
iCasino Product Launch Success
PENN launched standalone Hollywood iCasino products in Pennsylvania and Michigan with promising early results, leading to a jump in app rankings and increased market share.
Market Expansion in Canada
The Score and Score BET continue to perform well in Canada, with Ontario being the number one market. PENN plans to launch in Alberta, pending approvals.
Infrastructure Development Projects
Four retail growth projects are under construction, with expected openings from late 2024 to mid-2026, aimed at generating attractive returns.
Lowlights
Interactive EBITDA Loss
For the fourth quarter of 2024, the interactive segment reported an EBITDA loss of $109.8 million, exacerbated by customer-friendly sports betting results.
ESPN BET Performance
Despite some progress, ESPN BET is not yet meeting expectations for a podium position in market share, indicating challenges in realizing its full potential.
Competitive Supply Challenges
PENN faces competitive supply challenges in markets like Louisiana and the south suburbs of Chicago, impacting its retail segment.
Weather-Related Impacts
Weather events in early 2025 have negatively impacted year-over-year performance in certain markets, particularly in the Northeast and Midwest.
Company Guidance
During the PENN Entertainment Fourth Quarter 2024 Earnings Call, the company provided guidance for 2025, highlighting a plan to repurchase at least $350 million of shares within the year. For the retail segment, PENN projected revenue between $5.6 billion and $5.75 billion, with EBITDA expected to fall between $1.85 billion and $1.95 billion. On the digital side, revenue guidance ranged from $1.25 billion to $1.75 billion, with an anticipated EBITDA loss of $200 million to $100 million, marking a $350 million year-over-year improvement. Key performance metrics included expected ESPN BET handle market share of 4.7% and US iCasino GDR market share of 3.5% in their live jurisdictions. The company also highlighted ongoing growth projects, with four retail initiatives under construction, anticipated to drive substantial returns in the coming years. Additionally, the company expects to achieve profitability in its digital segment by 2026, with a break-even point anticipated by the end of 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.