It was horrible information for on line casino inventory Penn National Gaming (NASDAQ:PENN) this morning after it launched its earnings report. The information proved a disaster as traders cashed of their collective chips and took practically 13% of Penn’s market cap with them in Thursday morning’s buying and selling.
The basic numbers had been dangerous sufficient on their very own. Penn posted a non-GAAP earnings per share determine of -$1.75. Analysts had been anticipating a loss, however nowhere close to so pronounced; the analyst consensus seemed for -$0.57.
It bought worse from there; Penn posted income of $1.4 billion. That by itself wouldn’t be dangerous information. In reality, that quantity could be welcome at many firms. But for Penn National, it was one other catastrophe, because it was wanting analyst projections calling for $1.53 billion. It additionally represented an 11.9% shortfall in opposition to the fourth quarter of 2022.
Fueling an Expansion Takes Resources
Much of the issue stems again to Penn’s recent funding in ESPN Bet. Revenue could have been down—primarily by way of the Northeast and South segments—however the West and the Midwest had been each on the rise. However, the Interactive section slipped significantly, fueled by a rebranding of Barstool. It additionally put rather a lot into ESPN Bet, however Penn expects that funding to make up for misplaced time in an enormous approach as soon as North Carolina and New York come into play. Penn reported “…tremendous download volumes…” from the app’s launch and in the end appears to be like for ESPN Bet to achieve about 46% of the web sports activities betting market.
Is Penn National a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus ranking on PENN inventory based mostly on 4 Buys and 9 Holds assigned previously three months, as indicated by the graphic under. After a 39.26% loss in its share value over the previous 12 months, the typical PENN value goal of $29.08 per share implies 47.88% upside potential.
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