One-glance verdict
Overvalued
$-14.23 our estimate vs market $14.70
Wall Street consensus: $23.47 (-264.9% lower than our fair-value estimate)
203% below our estimate, beyond the bull case
Fundamentals snapshot
PENN Entertainment, Inc.
PENN · NMS · Consumer Cyclical · Resorts & Casinos
Current price
$14.70
52-week range
$11.65 - $22.36
Market cap
$1.97B
Balance sheet
Distressed
0.67x Concerning
Net debt $10.18B. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
3 Risks
1 rewards · 3 risks
- Reward Free cash flow was positive in 8/10 years.
- Risk Return on equity was -37.6% last year — the company lost money on shareholders' equity.
- Risk Insider ownership is only 1.6% (peer median: 12.5%).
- Risk Operating margin compressed from 17.1% to 7.9% over 3 years.
What this company does
PENN Entertainment, Inc.
PENN Entertainment runs casinos, racetracks, and online betting and gaming, making most of its money from people playing slot machines, table games, and betting on sports. This matters because the company's success depends on how much people spend at its locations and on its apps, which can be influenced by entertainment trends and how well it manages its costs to keep a healthy profit margin (the percent of each sales dollar left after day-to-day business costs).
How the company got here
PENN Entertainment's story began in 1972 with a group of leaders in Pennsylvania who wanted to get into thoroughbred horse racing. They started Penn National Race Course, and by 1982, Peter D. Carlino took over leadership. The company, originally known as Penn National Gaming, Inc., went public in 1994 and gradually expanded its operations. Over the years, PENN acquired other gaming and entertainment companies, significantly growing its portfolio of casinos and racetracks. In a significant rebranding move, the company officially changed its name to PENN Entertainment, Inc. in August 2022, reflecting a broader focus on integrated entertainment and digital offerings beyond traditional gaming.
What it actually does
PENN Entertainment operates a wide range of entertainment venues, primarily focused on casinos and horse racing. Think of them as running large entertainment complexes that offer not just gambling, but also hotels, dining, and other live events. They also have a growing online presence, offering sports betting and casino-style games through their digital platforms. Essentially, PENN aims to provide a complete entertainment experience, whether you're visiting one of their physical locations or engaging with them online.
Northeast
This segment represents PENN's casino and gaming operations located in the northeastern region of the United States. It includes properties like Ameristar East Chicago and Hollywood Casino at Greektown. These are the physical locations where customers can play slot machines, table games, and enjoy amenities such as restaurants and hotels. This part of the business is a significant contributor to PENN's overall revenue, forming the backbone of its regional gaming strategy.
South
The South segment encompasses PENN's gaming and entertainment properties situated in the southern United States. This includes casinos like 1st Jackpot Casino and Ameristar Vicksburg. Similar to the Northeast segment, these locations offer a full range of casino activities, dining, and hospitality services. This geographical division helps PENN manage and market its diverse set of regional properties effectively.
West
This segment covers PENN's gaming and entertainment operations in the western United States. Properties within this segment, such as M Resort Spa Casino, provide a variety of casino games, hotel accommodations, and dining experiences. By organizing its business this way, PENN can tailor its offerings and marketing to the specific markets in each region where it operates.
Midwest
The Midwest segment includes PENN's casino and racetrack operations located in the central part of the United States. These venues offer a mix of gaming, racing, and hospitality services. This division allows PENN to focus on the unique characteristics and customer base of the Midwest market, ensuring that its properties are well-positioned for success.
Interactive
This segment is PENN's foray into the digital world, encompassing online sports betting and iGaming (online casino games). It includes platforms like theScore Bet and theScore Casino. While historically a smaller part of the company's revenue compared to its physical casinos, this segment is a key focus for future growth. PENN is investing in its technology and digital platforms to create an 'omnichannel' experience, meaning a seamless connection between their online and physical offerings.
What management is betting on now
PENN Entertainment's main strategy is to create a seamless connection between its physical casinos and its online betting and gaming platforms, a concept known as an 'omnichannel' model. They are focusing on leveraging their large customer loyalty program, PENN Play, to encourage customers to use both their physical and digital offerings. Management is also investing in their own technology, including an in-house studio for creating online casino games, to better control their digital future and cross-sell opportunities across all their brands.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$42.60M
FY2024 Q4
$-118.10M
FY2025 Q1
$-83.30M
FY2025 Q2
$18.80M
FY2025 Q3
$8.20M
FY2025 Q4
$-83.20M
FY2026 Q1
$27.80M
FY2026 Q2
$143.30M
Revenue
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Net income
$33.10M
Diluted EPS
0.24
Operating cash flow
$240.70M
Free cash flow
$143.30M
Fetching…
Sources
Revenue
—
Net income
$-2.30M
Diluted EPS
-0.02
Operating cash flow
$122.40M
Free cash flow
$27.80M
Fetching…
Sources
Revenue
—
Net income
$-72.90M
Diluted EPS
-0.36
Operating cash flow
$107.20M
Free cash flow
$-83.20M
Fetching…
Sources
Revenue
—
Net income
$-864.60M
Diluted EPS
-6.03
Operating cash flow
$180.90M
Free cash flow
$8.20M
Fetching…
Sources
Revenue
—
Net income
$-17.40M
Diluted EPS
-0.12
Operating cash flow
$178.20M
Free cash flow
$18.80M
Fetching…
Sources
Revenue
—
Net income
$111.80M
Diluted EPS
0.68
Operating cash flow
$41.90M
Free cash flow
$-83.30M
Fetching…
Sources
Revenue
—
Net income
$-133.30M
Diluted EPS
-0.87
Operating cash flow
$102.90M
Free cash flow
$-118.10M
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Sources
Revenue
$1.64B
Net income
$-36.70M
Diluted EPS
-0.24
Operating cash flow
$174.70M
Free cash flow
$42.60M
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Sources
Is it cheap or expensive?
Fair value $-14.23 vs current price $14.70
Wall Street consensus is the average analyst price target: $23.47 (-264.9% lower than our fair-value estimate).
Our most-likely fair value is $-14.23 a share — about 196.9% below today's price of $14.70, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Distressed
Net debt $10.2B. Interest coverage 0.7x.
Net debt
$10.18B
Interest coverage
0.67x
PENN Entertainment, Inc.'s profit covers its interest bill about 0.7 times over. and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
PENN
BASELINE
PENN Entertainment, Inc.
Total debt $11.06B Interest coverage 0.67x This is the baseline the peer rows are being compared against.
Total debt $3.26B Interest coverage 5.56x +731% vs PENN Carries about 8.3x more debt cushion than PENN.
Total debt $25.92B Interest coverage 0.89x +34% vs PENN Carries about 1.3x more debt cushion than PENN.
Total debt $4.86B Interest coverage 2.47x +269% vs PENN Carries about 3.7x more debt cushion than PENN.
Total debt $12.79M Interest coverage 1,225.91x +182,997% vs PENN Carries about 1831.0x more debt cushion than PENN.
Total debt $6.91B Interest coverage -0.10x -100% vs PENN This peer has almost no interest-payment cushion compared with PENN.
What you should know
The case for and against PENN
1 Reward
3 Risks
Rewards
-
Free cash flow was positive in 8/10 years.
Risks
-
Return on equity was -37.6% last year — the company lost money on shareholders' equity.
-
Insider ownership is only 1.6% (peer median: 12.5%).
-
Operating margin compressed from 17.1% to 7.9% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
11.28x
P/B
1.00x
P/S
0.28x
EV/EBITDA
13.82x
PEG ratio
1.01x
Profitability
How much profit each dollar creates
Gross margin
35.2%
Operating margin
7.9%
Net margin
-12.7%
ROE
-37.6%
ROA
1.7%
Health
Liquidity and balance-sheet strength
Debt / equity
5.97x
Current ratio
0.89x
Quick ratio
0.76x
Total debt
$11.06B
Total cash
$887.20M
Growth
How the business has been compounding
Revenue TTM
$6.30B
Revenue 5Y CAGR
4.7%
EPS TTM
-6.43
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$651.20M
Free CF TTM
$-139.50M
FCF margin
-2.2%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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