tiprankstipranks
Trending News
More News >
Penn National Gaming (PENN)
NASDAQ:PENN

Penn National Gaming (PENN) AI Stock Analysis

Compare
3,173 Followers

Top Page

PE

Penn National Gaming

(NASDAQ:PENN)

Rating:61Neutral
Price Target:
$16.50
▲(5.70%Upside)
Penn National Gaming's overall score reflects financial challenges due to profitability issues and high leverage. However, positive market momentum, strategic investments, and resilience in core segments provide an optimistic outlook. The company's proactive approach to deleveraging and engaging with stakeholders adds to its potential for improvement.
Positive Factors
New Projects and Developments
Four new projects such as Hollywood Aurora and M Resort hotel are expected to provide a positive impact on estimates and sentiment.
Product Development
Product improvements to OSB with ESPN Bet recently launching the Mint Club rewards program.
Strategic Initiatives
An activist campaign by HG Vora could highlight underappreciated value and result in significant upside to the stock.
Negative Factors
Financial Performance
1Q adj. EBITDAR results missed consensus estimates by -6% with lower than expected results for both property level and interactive EBITDAR.
Future Guidance
Lower than expected guidance for 2025 with deeper than expected losses at interactive.
Market Share Challenges
The line of sight to market share gains required to generate positive EBITDA for ESPN Bet remains unclear.

Penn National Gaming (PENN) vs. SPDR S&P 500 ETF (SPY)

Penn National Gaming Business Overview & Revenue Model

Company DescriptionPENN Entertainment, Inc., together with its subsidiaries, provides integrated entertainment, sports content, and casino gaming experiences in North America. The company operates through five segments: Northeast, South, West, Midwest, and Interactive. It operates 44 properties in 20 states; online sports betting in 13 jurisdictions; and iCasino in five under a portfolio of brands, including Hollywood Casino, L'Auberge, Barstool Sportsbook, and theScore Bet. The company was formerly known as Penn National Gaming, Inc. and changed its name to PENN Entertainment, Inc. in August 2022. PENN Entertainment, Inc. was founded in 1972 and is based in Wyomissing, Pennsylvania.
How the Company Makes MoneyPenn National Gaming generates revenue through several key streams. The primary source is its network of land-based casinos and racetracks, where it collects income from gaming operations, including slot machines, table games, and sports betting. Additionally, the company has a significant online presence, earning money through its digital gaming and sports betting platforms. Penn National has leveraged strategic partnerships, such as its collaboration with Barstool Sports, to expand its brand and enhance its digital offerings. Revenue is also supplemented by food, beverage, and hospitality services provided at its various properties, contributing to a well-rounded income model.

Penn National Gaming Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: -0.64%|
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 Financial Statement Overview

Summary
Penn National Gaming shows revenue growth but struggles with profitability, evidenced by negative net profit margins and high leverage. Operational challenges are indicated by modest EBIT and EBITDA margins, while high debt levels and negative free cash flow suggest financial pressures.
Income Statement
62
Positive
The income statement shows a mixed performance with a notable revenue growth from 2020 to 2025, but profitability is a concern. While gross profit margins have been relatively stable, the net profit margin is negative in the TTM period due to a net loss. The EBIT and EBITDA margins are modest, indicating operational challenges.
Balance Sheet
55
Neutral
The balance sheet indicates high leverage with a significant debt-to-equity ratio, reflecting potential financial risk. While the equity ratio remains relatively stable, the return on equity is currently negative due to recent net losses. This highlights pressure on the company's financial stability.
Cash Flow
58
Neutral
Cash flow analysis reveals a concerning trend of negative free cash flow in the TTM period, although operating cash flow exceeds net income, indicating positive cash generation from operations. However, the free cash flow to net income ratio is negative, suggesting cash pressures.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
6.64B6.58B6.36B6.40B5.91B3.58B
Gross Profit
2.38B2.16B1.93B2.77B2.76B1.71B
EBIT
145.80M72.50M363.60M974.00M1.06B333.60M
EBITDA
840.50M562.80M400.20M1.63B1.45B196.90M
Net Income Common Stockholders
-85.00M-311.50M-490.00M222.10M420.80M-669.10M
Balance SheetCash, Cash Equivalents and Short-Term Investments
591.60M706.60M1.07B1.62B1.86B1.85B
Total Assets
15.09B15.26B16.06B17.50B16.87B14.67B
Total Debt
8.38B11.25B11.54B12.91B11.61B11.16B
Net Debt
7.79B10.54B10.47B11.28B9.74B9.30B
Total Liabilities
12.12B12.40B12.86B13.91B12.78B12.01B
Stockholders Equity
2.97B2.86B3.20B3.60B4.10B2.66B
Cash FlowFree Cash Flow
-137.30M-123.40M74.00M605.80M627.80M197.00M
Operating Cash Flow
469.90M359.30M455.90M878.20M896.10M338.80M
Investing Cash Flow
-629.80M-541.20M-742.60M-258.60M-1.22B-233.70M
Financing Cash Flow
-151.80M-183.10M-262.60M-853.00M339.90M1.31B

Penn National Gaming Technical Analysis

Technical Analysis Sentiment
Negative
Last Price15.61
Price Trends
50DMA
15.32
Positive
100DMA
17.36
Negative
200DMA
18.42
Negative
Market Momentum
MACD
0.20
Negative
RSI
48.91
Neutral
STOCH
73.06
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 15.61 is above the 20-day moving average (MA) of 15.51, above the 50-day MA of 15.32, and below the 200-day MA of 18.42, indicating a neutral trend. The MACD of 0.20 indicates Negative momentum. The RSI at 48.91 is Neutral, neither overbought nor oversold. The STOCH value of 73.06 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 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 0 New Risks

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
BYBYD
78
Outperform
$6.13B11.9735.62%0.98%6.06%10.05%
LNLNW
77
Outperform
$6.93B21.9846.19%7.26%54.83%
MGMGM
70
Outperform
$8.64B14.2121.38%2.76%-14.31%
62
Neutral
$6.82B11.052.80%4.32%2.67%-24.92%
62
Neutral
$8.80B22.98-51.73%1.19%-0.08%-48.66%
61
Neutral
$2.48B-2.81%5.51%92.46%
CZCZR
57
Neutral
$5.32B-5.56%-1.25%-130.83%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PENN
Penn National Gaming
15.61
-2.91
-15.71%
BYD
Boyd Gaming
73.27
19.23
35.58%
MGM
MGM Resorts
31.73
-8.66
-21.44%
LNW
Light & Wonder
82.14
-11.61
-12.38%
WYNN
Wynn Resorts
84.18
-3.60
-4.10%
CZR
Caesars Entertainment
25.56
-10.56
-29.24%

Penn National Gaming Corporate Events

Private Placements and FinancingStock Buyback
PENN Entertainment to Repurchase Convertible Senior Notes
Neutral
Jun 13, 2025

On June 13, 2025, PENN Entertainment, Inc. entered into agreements to repurchase approximately $223.8 million of its 2.75% Convertible Senior Notes due 2026. The transactions, expected to close on June 20, 2025, will result in a total purchase price of approximately $230.9 million, reducing the outstanding notes to about $106.7 million. HudsonWest LLC served as the exclusive financial advisor for these transactions.

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.

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
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.