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Penn National Gaming (PENN)
NASDAQ:PENN
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Penn National Gaming
(NASDAQ:PENN)
Rating:48Neutral
Price Target:
$15.50
▲( 5.73% Upside)
Positive Factors
Consumer Trends
Consumer trends were healthy, growing in markets with and without new competition.
Product Improvements
Product improvements to OSB with ESPN Bet recently launching the Mint Club rewards program.
Negative Factors
Financial Outlook
The weaker trends in Regional revenues contribute to a softer financial outlook for the company.
Weather Impact
Weather had a negative impact on the first two months of the year.
Penn National Gaming (PENN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.21B
Dividend YieldN/A
Average Volume (3M)3.81M
Price to Earnings (P/E)―
Beta (1Y)1.55
Revenue Growth5.51%
EPS Growth92.46%
CountryUS
Employees23,118
SectorConsumer Cyclical
Sector Strength72
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)0.68
Shares Outstanding150,621,490
10 Day Avg. Volume3,591,585
30 Day Avg. Volume3,810,389
Financial Highlights & Ratios
PEG Ratio-0.20
Price to Book (P/B)0.90
Price to Sales (P/S)0.00
P/FCF Ratio-15.52
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$22.06Price Target Upside50.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Penn National Gaming Business Overview & Revenue Model
Company DescriptionPenn National Gaming, Inc. (PENN) is a diversified gaming and entertainment company that operates in the United States. The company primarily engages in the ownership and management of gaming and racing facilities, as well as video gaming terminal operations. It offers a variety of gaming and betting options through its land-based casinos, online sports betting platforms, and digital media partnerships. The company is known for its broad portfolio of properties, including casinos, racetracks, and an expanding digital presence.
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. The company must address these issues to improve its financial standing and sustain growth.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
14.66
Price Trends
15.72
Negative
17.94
Negative
18.67
Negative
Market Momentum
-0.21
Positive
41.89
Neutral
13.61
Positive
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 14.66 is below the 20-day moving average (MA) of 15.60, below the 50-day MA of 15.72, and below the 200-day MA of 18.67, indicating a bearish trend. The MACD of -0.21 indicates Positive momentum. The RSI at 41.89 is Neutral, neither overbought nor oversold. The STOCH value of 13.61 is Positive, 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 40 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 1 New Risks
1.
We rely on third party cloud infrastructure services to deliver our offerings to users, and we have experienced, and expect in the future to experience, service interruptions, delays, and outages. Q4, 2024
Penn National Gaming Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.97B | 11.98 | 35.62% | 0.95% | 6.06% | 10.05% | |
73 Outperform | $6.96B | 22.07 | 46.19% | ― | 7.26% | 54.83% | |
68 Neutral | $8.95B | 14.05 | 21.38% | ― | 2.76% | -14.31% | |
62 Neutral | $6.88B | 11.26 | 2.78% | 3.93% | 2.65% | -22.00% | |
59 Neutral | $6.12B | ― | -5.56% | ― | -1.25% | -130.83% | |
57 Neutral | $9.51B | 24.82 | -51.73% | 1.09% | -0.08% | -48.66% | |
48 Neutral | $2.21B | ― | -2.81% | ― | 5.51% | 92.46% |
* Consumer Cyclical Sector Average
Performance Comparison
PENN
Penn National Gaming
14.66
-1.37
-8.55%
BYD
Boyd Gaming
73.33
22.13
43.22%
MGM
MGM Resorts
31.35
-8.37
-21.07%
LNW
Light & Wonder
82.01
-12.73
-13.44%
WYNN
Wynn Resorts
90.91
-2.65
-2.83%
CZR
Caesars Entertainment
27.87
-5.76
-17.13%
Penn National Gaming Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: -6.68%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
PENN Entertainment's earnings call highlighted resilience and growth in both retail and interactive segments despite challenges. Weather and one-time accounting benefits impacted results, but the company showed strong cash flow management, strategic investments, and promising trends in their core and interactive segments.Q1-2025 Updates
Positive Updates
Resilience in Retail Gaming
Despite severe weather challenges, gaming volumes rebounded nicely in March, continuing through April and into May, with a notable weekend performance being the second-best of the year.
Success in Interactive Segment
The Interactive segment saw record gaming revenue and year-over-year improvements in adjusted revenue and EBITDA, despite a $10 million EBITDA impact from customer-friendly sports-betting outcomes.
Positive Trends in Core Segments
Rated play increased in Q1 and continued into April and May, with increased spend per visit. The VIP segments saw increased visitation and spend per visit.
Strong Cash Position and Deleveraging
The company ended Q1 with $1.5 billion in liquidity, de-levered in the quarter, and expects to continue deleveraging throughout 2025.
Strategic Investments and Growth Projects
Four growth projects remain on-budget and on-schedule, with a strategic new land-based Hollywood casino planned in Council Bluffs, Iowa.
Stand-Alone iCasino App Success
The stand-alone Hollywood iCasino app showed strong results, with 70% of theoretical revenue coming from incremental sources.
Negative Updates
Weather Impact on Retail EBITDAR
Severe weather in January and February impacted adjusted retail EBITDAR by at least $10 million in the quarter.
Accounting Benefit Affecting Year-Over-Year Comparison
A one-time $5 million accounting benefit in Q1 of the previous year impacted year-over-year results.
Interactive Segment Loss
The Interactive segment reported a loss of $89 million in adjusted EBITDA despite improvements.
Higher Corporate Expenses
Corporate expenses were higher than expected due to legal and advisory-related costs of $7.7 million.
Uncertain Economic Environment
Unrated play decreased slightly in Q1 compared to the prior year, reflecting an uncertain economic environment.
Company Guidance
During the PENN Entertainment First Quarter 2025 Earnings Call, several metrics and financial highlights were shared. The company reported retail revenue of $1.4 billion, adjusted EBITDA of $457 million, and adjusted EBITDA margins of 33.1%. Severe weather challenges impacted the quarter, reducing adjusted retail EBITDAR by at least $10 million. Despite this, gaming revenue rebounded, with March and April showing promising trends. The CEO, Jay Snowden, highlighted the opening of a new Hollywood casino in Council Bluffs, Iowa, with construction expected to take 18 to 24 months. The company also noted strong engagement from its VIP and mid-worth customer segments and a growing database of over 32 million members. Interactive segment performance was affected by sports-betting outcomes, leading to a $10 million EBITDA impact. However, significant improvements were seen with year-over-year increases of 21% in retail and 165% in online theoretical play in Pennsylvania. The company remains on-track with its four growth projects, maintaining guidance for 2025 with expectations of positive interactive EBITDA in 2026.Penn National Gaming Corporate Events
Business Operations and StrategyFinancial Disclosures
PENN Entertainment Highlights Strategic Priorities in Shareholder Letter
Positive
May 15, 2025
On May 15, 2025, PENN Entertainment issued a letter to shareholders highlighting its strategic priorities and recent performance. The company is focused on enhancing shareholder value through its omni-channel strategy, which integrates digital and retail operations to capture market growth. PENN’s efforts include engaging with HG Vora Capital Management to resolve differences, expanding its customer base, and improving profitability in its Interactive segment. The company reported significant growth in its digital customer base and revenue, with expectations of profitability in the Interactive segment by the end of 2025. PENN also plans to reduce leverage and return capital to shareholders, demonstrating a commitment to financial stability and shareholder engagement.
The most recent analyst rating on (PENN) stock is a Hold with a $20.00 price target. To see the full list of analyst forecasts on Penn National Gaming stock, see the PENN Stock Forecast page.
Executive/Board ChangesBusiness Operations and Strategy
PENN Entertainment Announces Board Changes and New Nominations
Neutral
Apr 28, 2025
On April 25, 2025, PENN Entertainment announced significant changes to its Board of Directors, with Ronald J. Naples resigning and Barbara Shattuck Kohn and Saul Reibstein deciding not to seek reelection at the upcoming annual meeting. The Board, now reduced to eight members, plans to nominate Johnny Hartnett and Carlos Ruisanchez, who bring valuable industry expertise, to fill the vacancies. These changes are part of PENN’s strategy to enhance value creation, particularly in its Interactive segment, while avoiding a proxy fight. The company remains focused on growth opportunities and maintaining strong shareholder engagement.
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.