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1. Company Snapshot

1.a. Company Description

PENN 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.

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1.b. Last Insights on PENN

PENN Entertainment's recent performance was negatively impacted by its Q3 loss, which widened to $0.22 per share, exceeding the Zacks Consensus Estimate of a loss of $0.1. The company's revenue also missed estimates. Additionally, the early termination of its U.S. online sports betting agreement with ESPN, which was underperforming with only a 2.8% market share, has raised concerns. However, some analysts view PENN Entertainment as a potential buy despite the partnership's failure.

1.c. Company Highlights

2. Penn Entertainment's Strategic Shift: A Path to Profitability

Penn Entertainment reported revenues of $1.697 billion for the third quarter of 2025, with the interactive segment generating $297.7 million and the retail segment contributing $1.4 billion. The company's adjusted EBITDAR was $465.8 million for the retail segment, while the interactive segment reported an adjusted EBITDA loss of $76.6 million. The actual EPS came out at -$0.22, missing estimates of -$0.1. The company's financial performance was impacted by the early termination of its marketing agreement with ESPN, effective December 1.

Publication Date: Nov -15

📋 Highlights
  • ESPN Agreement Termination: Early termination of the marketing agreement with ESPN saves $150 million annually in fixed costs, freeing resources for Score Bet investment.
  • Score Bet Rebranding: Unification of US/Canadian sports betting under Score Bet aims to boost unit economics, with 4 million monthly active users across North America.
  • Interactive Segment Loss Narrows: Q3 adjusted EBITDA loss of $76.6M (vs. $297.7M revenue), with projected smaller Q4 losses and $354M in share repurchases completed.
  • Retail Performance: Q3 retail revenue hit $1.4B with $465.8M adjusted EBITDAR, projecting $1.41B–$1.43B revenue and $455M–$475M EBITDAR in Q4.
  • 2026 Profitability Target: Exit ESPN costs by year-end 2025, aiming for breakeven in 2026 with iCasino-first strategy and $750M new share buyback authorization.

Financial Performance and Guidance

The company's guidance for the fourth quarter expects revenues to range from $1.41 billion to $1.43 billion, with adjusted EBITDAR expected to be between $455 million and $475 million. The company anticipates a smaller loss in the fourth quarter compared to the third quarter. With the ESPN deal behind them, Penn Entertainment expects to be breakeven or better in 2026, providing a clean runway for future growth.

Strategic Realignment and Future Prospects

Penn Entertainment is realigning its interactive focus to enhance connectivity and cross-sell opportunities across its ecosystem. The company is unifying its US and Canadian online sports betting brands under the Score Bet brand, which has delivered strong results in Ontario. This shift is expected to drive enhanced unit economics and profitability. The company's digital realignment will free up resources to invest in North American markets and customer cohorts with strong return potential.

Valuation and Outlook

With a P/S Ratio of 0.32 and an EV/EBITDA of -47.24, the market seems to be pricing in significant challenges for Penn Entertainment. However, the company's strategic realignment and focus on profitability could potentially lead to improved financial performance. Analysts estimate next year's revenue growth at 3.5%, indicating a positive outlook. The company's efforts to delever and improve its financials are expected to continue, with a focus on delivering returns for shareholders.

Operational Highlights and Challenges

The retail segment performed well, with revenues of $1.4 billion and adjusted EBITDAR of $465.8 million. However, margins were down 90 basis points year-over-year due to increased marketing and labor costs. The company is confident in its ability to deliver best-in-market offerings and experiences, and believes that customers will settle back into their usual habits once the promotional noise dies down. The company's digital business is expected to drive growth, with a focus on iCasino and the Canadian market.

3. NewsRoom

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Forget PENN Entertainment, This Sports Betting Stock Is a Much Better Buy

Dec -04

Source: fool.com

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Justin Sebastiano Joins Game Play Network as Executive Vice President and Chief Financial Officer

Dec -02

Source: prnewswire.com

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PENN Entertainment Celebrates the Official Opening of Second Hotel Tower at M Resort Las Vegas

Dec -01

Source: businesswire.com

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theScore Bet Now Live In 21 U.S. Jurisdictions

Dec -01

Source: businesswire.com

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Head to Head Comparison: PENN Entertainment (NASDAQ:PENN) versus GameSquare (NASDAQ:GAME)

Nov -22

Source: defenseworld.net

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Banco Bilbao Vizcaya Argentaria S.A. Sells 5,564 Shares of PENN Entertainment, Inc. $PENN

Nov -20

Source: defenseworld.net

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PENN Entertainment, Inc. (PENN) Q3 2025 Earnings Call Transcript

Nov -08

Source: seekingalpha.com

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PENN Entertainment And ESPN: Sports Betting Failure Exposes Weakness, But PENN May Still Be A Buy

Nov -06

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.81%)

6. Segments

Gaming

Expected Growth: 6.0%

PENN Entertainment's 6.0% gaming growth is driven by increasing demand for online sports betting, expansion into new markets, and strategic partnerships. Additionally, the company's focus on enhancing customer experience through technology upgrades and loyalty programs contributes to the growth. Furthermore, the rising popularity of iGaming and the growing presence of Barstool Sports also support the segment's growth.

Other

Expected Growth: 5.5%

PENN Entertainment, Inc.'s 5.5% growth is driven by increasing demand for online gaming, strategic acquisitions, and expansion into new markets. Additionally, the company's focus on digital transformation, improved operational efficiency, and a strong brand portfolio have contributed to its growth momentum.

Food and Beverage

Expected Growth: 5.0%

PENN Entertainment, Inc.'s Food and Beverage segment growth of 5.0% is driven by increasing foot traffic in casinos, strategic menu pricing, and enhanced customer experience through renovations and technology upgrades. Additionally, the company's focus on premium amenities and loyalty programs contributes to higher average spend per customer, further boosting revenue growth.

Hotel

Expected Growth: 4.5%

PENN Entertainment's hotel segment growth is driven by increasing demand for leisure travel, strategic acquisitions, and expansion into new markets. Additionally, the company's focus on enhancing customer experience through renovations and technology upgrades contributes to its 4.5% growth rate.

7. Detailed Products

Retail Casinos

PENN Entertainment, Inc. operates a portfolio of retail casinos across the United States, offering a range of gaming options, dining, and entertainment experiences.

Online Gaming

PENN Entertainment, Inc. provides online gaming platforms, allowing users to access a variety of games, including slots, table games, and sports betting, from the comfort of their own homes.

Sports Betting

PENN Entertainment, Inc. offers sports betting services, enabling users to place wagers on various sports and events, both online and in-person.

Social Casino

PENN Entertainment, Inc. operates social casino platforms, providing a range of free-to-play games and social features, without the need for real-money wagering.

iGaming

PENN Entertainment, Inc. offers iGaming solutions, providing a range of online gaming products and services to partners and customers.

8. PENN Entertainment, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

PENN Entertainment, Inc. operates in the gaming and hospitality industry, where substitutes are limited. However, the rise of online gaming and sports betting platforms poses a moderate threat to the company's traditional casino business.

Bargaining Power Of Customers

PENN Entertainment, Inc. has a diverse customer base, and no single customer has significant bargaining power. The company's loyalty programs and rewards also help to retain customers.

Bargaining Power Of Suppliers

PENN Entertainment, Inc. has a diverse supplier base, and no single supplier has significant bargaining power. The company's scale and purchasing power also help to negotiate favorable terms with suppliers.

Threat Of New Entrants

The gaming and hospitality industry is highly regulated, and new entrants face significant barriers to entry. However, the rise of online gaming and sports betting platforms has increased the threat of new entrants, particularly from technology companies.

Intensity Of Rivalry

The gaming and hospitality industry is highly competitive, with many established players competing for market share. PENN Entertainment, Inc. faces intense competition from regional and national players, as well as from online gaming and sports betting platforms.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 49.96%
Debt Cost 14.22%
Equity Weight 50.04%
Equity Cost 14.22%
WACC 14.22%
Leverage 99.84%

11. Quality Control: PENN Entertainment, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Marriott Vacations Worldwide

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Value: 6.7

Growth: 5.8

Quality: 5.5

Yield: 6.0

Momentum: 3.5

Volatility: 4.7

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A-Score: 4.5/10

Value: 4.3

Growth: 8.9

Quality: 5.5

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Momentum: 1.0

Volatility: 7.3

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Growth: 7.7

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PENN

A-Score: 3.6/10

Value: 8.2

Growth: 2.1

Quality: 1.9

Yield: 0.0

Momentum: 5.5

Volatility: 4.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

13.82$

Current Price

13.82$

Potential

-0.00%

Expected Cash-Flows