What PENN Entertainment (PENN)'s iGaming and ESPN BET Moves Mean for Shareholders

• In August 2024, InvestingPro’s Fair Value models identified PENN Entertainment as significantly undervalued, emphasizing major mispricing due to recent strategic initiatives including iGaming expansion and the ESPN BET platform launch.
• Major analysts maintain a favorable outlook on PENN Entertainment, highlighting that these developments are unlocking new value and strengthening the company's long-term prospects in the evolving gaming industry.
• We will examine how renewed analyst confidence in PENN’s iGaming and ESPN BET efforts could influence the company’s investment narrative.

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PENN Entertainment Investment Narrative Recap

To be a shareholder in PENN Entertainment today, the central belief is that iGaming and digital sports betting, especially through ESPN BET, will more than offset legacy casino headwinds and catalyze sustainable growth. The August 2024 news highlighting PENN’s undervaluation and renewed analyst confidence could energize sentiment, but it does not materially change the immediate risk: PENN’s Interactive segment must achieve ambitious growth targets as its losses and cash burn continue to weigh on overall financial performance.

The recent launch of the FanCenter feature on ESPN BET is particularly relevant. This technology update supports the broader investment catalyst of deeper ESPN integration, with the aim of acquiring and retaining more digital customers, thereby improving margins and accelerating PENN’s path to profitability in what is a highly competitive online space.

However, amid this optimism, investors should be aware that PENN’s online business is still unprofitable and...

Read the full narrative on PENN Entertainment (it's free!)

PENN Entertainment's outlook anticipates $8.0 billion in revenue and $471.4 million in earnings by 2028. This assumes a 6.0% annual revenue growth rate and a $547 million increase in earnings from the current -$75.6 million.

Uncover how PENN Entertainment's forecasts yield a $22.00 fair value, a 11% upside to its current price.

Exploring Other Perspectives

Four fair value estimates from the Simply Wall St Community span from US$7 to US$86.21, reflecting substantial diversity in projections for PENN Entertainment. Some see digital investments as future growth drivers, but as Interactive losses remain elevated, your outlook may depend on how quickly these efforts translate to improved earnings and cash flow.

Explore 4 other fair value estimates on PENN Entertainment - why the stock might be worth over 4x more than the current price!

Build Your Own PENN Entertainment Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your PENN Entertainment research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free PENN Entertainment research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate PENN Entertainment's overall financial health at a glance.

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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.

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