Investors in PENN Entertainment Inc (PENN, Financial) have experienced a rollercoaster ride in terms of stock performance. With a current market capitalization of $3.95 billion, the stock price stands at $26.02. Over the past week, PENN has seen a 3.71% gain, offering a glimmer of optimism for shareholders. However, the past three months tell a different story, with a 13.38% loss, indicating a period of volatility for the company. The GF Value currently stands at $44.59, a significant drop from the past GF Value of $54.5. This decline in GF Value, coupled with the stock's performance, suggests that PENN may be a Possible Value Trap, and investors should Think Twice before making any decisions.
Introduction to PENN Entertainment Inc
PENN Entertainment Inc, operating within the Travel & Leisure industry, has evolved significantly since its inception in 1972. The company now manages 43 properties across 20 states, with a focus on land-based casinos which contribute to 90% of its 2022 sales. The remaining 10% stems from its interactive segment, which includes sports, iGaming, and media revenue. PENN's retail portfolio boasts high-30% EBITDAR margins, aiding in securing licenses for digital wagering markets. The company's media assets, such as theScore and its partnership with ESPN launched on November 14, 2023, provide valuable sports betting/iGaming technology and customer access, cementing PENN's position as a digital leader in the industry.
Profitability Analysis of PENN
PENN's Profitability Rank stands at 6/10, reflecting a moderate level of profitability within the industry. The company's Operating Margin is 12.18%, which is commendable, surpassing 64.63% of 817 companies in the same sector. However, the Return on Equity (ROE) is at -2.91%, and the Return on Assets (ROA) is at -0.65%, indicating challenges in generating profits from shareholders' equity and company assets, respectively. On a brighter note, the Return on Invested Capital (ROIC) is an impressive 14.58%, outperforming 86.14% of its peers. PENN has maintained profitability for 7 out of the past 10 years, which is better than 60.97% of 766 companies in the industry.
Growth Prospects of PENN
The Growth Rank for PENN is 4/10, indicating a below-average growth trajectory when compared to industry counterparts. The 3-Year Revenue Growth Rate per Share has declined by 7.00%, although this is still better than 34.6% of 763 companies. The 5-Year Revenue Growth Rate per Share also shows a decrease of 1.00%, yet this is an improvement over 63.03% of 714 companies. Looking ahead, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is projected at 5.80%, which is more promising and better than 33.85% of 130 companies. The 3-Year EPS without NRI Growth Rate stands at 8.90%, and the EPS Growth Rate (Future 3Y To 5Y Est) is forecasted at a robust 43.40%, outshining 76% of 25 companies.
Key Shareholders in PENN
Notable investors have taken significant positions in PENN, with Ron Baron (Trades, Portfolio) leading the pack holding 6,138,520 shares, representing a 4.04% share percentage. Following him is Jim Simons (Trades, Portfolio) with 1,396,900 shares, accounting for 0.92% of the shares, and Steven Cohen (Trades, Portfolio) with 660,668 shares, making up 0.44%. These holders reflect the confidence and interest of seasoned investors in PENN's market potential.
Competitive Landscape
When compared to its competitors, PENN stands in a competitive position with a market cap of $3.95 billion. Melco Resorts and Entertainment Ltd (MLCO, Financial) is close behind with a market cap of $3.88 billion, while Hilton Grand Vacations Inc (HGV, Financial) slightly surpasses PENN with a market cap of $4.34 billion. Red Rock Resorts Inc (RRR, Financial) trails with a market cap of $3.11 billion. These figures highlight the tight competition within the Travel & Leisure industry and the importance of strategic positioning for PENN.
Conclusion
In summary, PENN Entertainment Inc's recent stock performance has been a mixed bag, with short-term gains overshadowed by quarterly losses. The company's valuation, as indicated by the GF Value, suggests caution for potential investors. PENN's profitability metrics, while mixed, show areas of strength, particularly in its operating margin and ROIC. Growth prospects appear challenging in the short term but are more optimistic in the long-term forecast. The presence of significant shareholders like Ron Baron (Trades, Portfolio), Jim Simons (Trades, Portfolio), and Steven Cohen (Trades, Portfolio) may offer some reassurance to investors. Finally, PENN's market cap holds its own against competitors, indicating a resilient position in the industry. Investors should weigh these factors carefully when considering their investment strategy for PENN.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
