PENN Entertainment, Inc. (NASDAQ:PENN) Second-Quarter Results: Here's What Analysts Are Forecasting For This Year

Investors in PENN Entertainment, Inc. (NASDAQ:PENN) had a good week, as its shares rose 2.1% to close at US$18.24 following the release of its quarterly results. Revenues of US$1.7b arrived in line with expectations, although statutory losses per share were US$0.18, an impressive 28% smaller than what broker models predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for PENN Entertainment

Taking into account the latest results, the consensus forecast from PENN Entertainment's 20 analysts is for revenues of US$6.69b in 2024. This reflects a modest 6.5% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 84% to US$1.30. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$6.67b and losses of US$1.35 per share in 2024. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.

The average price target held steady at US$22.82, seeming to indicate that business is performing in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on PENN Entertainment, with the most bullish analyst valuing it at US$30.00 and the most bearish at US$18.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await PENN Entertainment shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the PENN Entertainment's past performance and to peers in the same industry. It's clear from the latest estimates that PENN Entertainment's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 9.1% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect PENN Entertainment to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$22.82, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for PENN Entertainment going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for PENN Entertainment that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.