PENN Entertainment (NASDAQ:PENN) Shares Gap Up on Earnings Beat

Key Points

• Earnings beat: PENN reported $0.11 EPS vs. $0.06 expected and $1.78B in revenue (vs. $1.74B est.), sending shares to gap up from $14.77 to an open of $15.50 and trading as high as $17.01 on heavy volume.
• Analyst momentum is positive but mixed: multiple firms raised targets (e.g., Barclays to $23, Mizuho to $22), yet the consensus rating is Hold with an average price target of $19.79 (8 Buy, 6 Hold, 1 Sell).
• Fundamentals show growth but weakness: revenue rose 6.4% year‑over‑year, but PENN has a negative net margin (-12.11%) and ROE (-1.94%) and high leverage (debt-to-equity 3.92) with a market cap around $2.27B.

PENN Entertainment, Inc. (NASDAQ:PENN - Get Free Report) shares gapped up before the market opened on Thursday following a stronger than expected earnings report. The stock had previously closed at $14.77, but opened at $15.50. PENN Entertainment shares last traded at $17.01, with a volume of 1,825,828 shares changing hands.

The company reported $0.11 earnings per share for the quarter, beating the consensus estimate of $0.06 by $0.05. The firm had revenue of $1.78 billion for the quarter, compared to analysts' expectations of $1.74 billion. PENN Entertainment had a negative net margin of 12.11% and a negative return on equity of 1.94%. The business's revenue was up 6.4% on a year-over-year basis. During the same period in the prior year, the firm earned $0.68 EPS.

Wall Street Analysts Forecast Growth

Several research firms have commented on PENN. Deutsche Bank Aktiengesellschaft increased their target price on PENN Entertainment from $16.00 to $17.00 and gave the company a "hold" rating in a research report on Friday, February 27th. Barclays lifted their target price on PENN Entertainment from $22.00 to $23.00 and gave the stock an "overweight" rating in a report on Thursday, April 16th. Mizuho raised their target price on PENN Entertainment from $19.00 to $22.00 and gave the company an "outperform" rating in a research note on Thursday, March 12th. Citigroup upped their price objective on shares of PENN Entertainment from $15.00 to $16.00 and gave the stock a "neutral" rating in a report on Monday, March 2nd. Finally, Morgan Stanley increased their price target on PENN Entertainment from $15.00 to $16.00 and gave the company an "equal weight" rating in a research report on Wednesday, April 8th. Eight investment analysts have rated the stock with a Buy rating, six have given a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat.com, PENN Entertainment presently has a consensus rating of "Hold" and an average price target of $19.79.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in PENN. Quarry LP bought a new position in PENN Entertainment during the fourth quarter worth about $36,000. IFP Advisors Inc raised its position in shares of PENN Entertainment by 76.2% in the fourth quarter. IFP Advisors Inc now owns 2,766 shares of the company's stock valued at $41,000 after purchasing an additional 1,196 shares during the period. Modus Advisors LLC purchased a new stake in shares of PENN Entertainment during the 4th quarter valued at approximately $47,000. Cloud Capital Management LLC bought a new position in PENN Entertainment in the 3rd quarter worth approximately $54,000. Finally, Triumph Capital Management purchased a new position in PENN Entertainment in the 3rd quarter valued at approximately $54,000. 91.69% of the stock is currently owned by hedge funds and other institutional investors.

PENN Entertainment Price Performance

The firm has a market cap of $2.27 billion, a P/E ratio of -2.82, a PEG ratio of 0.50 and a beta of 1.32. The business's fifty day simple moving average is $14.38 and its 200-day simple moving average is $14.72. The company has a current ratio of 0.79, a quick ratio of 0.79 and a debt-to-equity ratio of 3.92.

About PENN Entertainment

PENN Entertainment, Inc NASDAQ: PENN is a leading operator of gaming and racing facilities in the United States. The company's business activities encompass land-based casinos, pari-mutuel racetracks, off-track wagering, and ancillary amenities such as hotels, restaurants and entertainment venues. In August 2022, the company rebranded from Penn National Gaming to PENN Entertainment to reflect its expanding footprint across digital and traditional segments of the gaming industry.

The company's portfolio includes well-known properties under the Hollywood Casino and Ameristar Casino brands, located across multiple states including Pennsylvania, Ohio, Missouri and West Virginia.

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