NasdaqGS:PENN

Stock Analysis Report

Executive Summary

Penn National Gaming, Inc. owns and manages gaming and racing facilities, and operates video gaming terminals with a focus on slot machine entertainment.

Rewards

Trading at 18.8% below its fair value

Earnings are forecast to grow 45.81% per year

Risk Analysis

Interest payments are not well covered by earnings

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Profit margins (0.8%) are lower than last year (2.6%)

+ 1 more risk


Snowflake Analysis

Moderate growth potential and slightly overvalued.


Similar Companies

Share Price & News

How has Penn National Gaming's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PENN's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-0.9%

PENN

-1.2%

US Hospitality

0.06%

US Market


1 Year Return

52.2%

PENN

6.0%

US Hospitality

19.4%

US Market

Return vs Industry: PENN exceeded the US Hospitality industry which returned 6% over the past year.

Return vs Market: PENN exceeded the US Market which returned 19.4% over the past year.


Shareholder returns

PENNIndustryMarket
7 Day-0.9%-1.2%0.06%
30 Day42.0%-5.0%1.1%
90 Day67.5%7.0%8.9%
1 Year52.2%52.2%8.7%6.0%21.9%19.4%
3 Year158.0%158.0%35.7%26.8%48.9%39.3%
5 Year124.4%124.4%47.7%32.2%71.9%53.1%

Price Volatility Vs. Market

How volatile is Penn National Gaming's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Penn National Gaming undervalued compared to its fair value and its price relative to the market?

18.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PENN ($36.92) is trading below our estimate of fair value ($45.48)

Significantly Below Fair Value: PENN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: PENN is poor value based on its PE Ratio (97.3x) compared to the Hospitality industry average (24x).

PE vs Market: PENN is poor value based on its PE Ratio (97.3x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: PENN is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: PENN is good value based on its PB Ratio (2.2x) compared to the US Hospitality industry average (2.2x).


Next Steps

Future Growth

How is Penn National Gaming forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

45.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PENN's forecast earnings growth (45.8% per year) is above the savings rate (1.7%).

Earnings vs Market: PENN's earnings (45.8% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: PENN's revenue (2.7% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: PENN's revenue (2.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PENN's Return on Equity is forecast to be low in 3 years time (7.8%).


Next Steps

Past Performance

How has Penn National Gaming performed over the past 5 years?

33.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PENN has a large one-off loss of $173.1M impacting its December 31 2019 financial results.

Growing Profit Margin: PENN's current net profit margins (0.8%) are lower than last year (2.6%).


Past Earnings Growth Analysis

Earnings Trend: PENN has become profitable over the past 5 years, growing earnings by 33.9% per year.

Accelerating Growth: PENN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PENN had negative earnings growth (-53.1%) over the past year, making it difficult to compare to the Hospitality industry average (-9.8%).


Return on Equity

High ROE: PENN's Return on Equity (2.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Penn National Gaming's financial position?


Financial Position Analysis

Short Term Liabilities: PENN's short term assets ($628.2M) do not cover its short term liabilities ($877.3M).

Long Term Liabilities: PENN's short term assets ($628.2M) do not cover its long term liabilities ($11.5B).


Debt to Equity History and Analysis

Debt Level: PENN's debt to equity ratio (126.6%) is considered high.

Reducing Debt: PENN had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: PENN's debt is well covered by operating cash flow (23.3%).

Interest Coverage: PENN's interest payments on its debt are not well covered by EBIT (1.4x coverage).


Balance Sheet

Inventory Level: PENN has a high level of physical assets or inventory.

Debt Coverage by Assets: PENN's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

What is Penn National Gaming's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage3.0%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate PENN's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate PENN's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if PENN's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if PENN's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of PENN's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.3yrs

Average management tenure


CEO

Jay Snowden (43yo)

0.08yrs

Tenure

US$4,502,258

Compensation

Mr. Jay A. Snowden has been Chief Executive Officer of Penn National Gaming, Inc., since January 1, 2020. He has been President at Penn National Gaming, Inc., since March 29, 2017 and was its Chief Operati ...


CEO Compensation Analysis

Compensation vs Market: Jay's total compensation ($USD4.50M) is about average for companies of similar size in the US market ($USD4.89M).

Compensation vs Earnings: Jay's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Jay Snowden
CEO, President & Director0.08yrsUS$4.50m0.091% $3.9m
William Fair
Executive VP of Finance & CFO3.1yrsUS$2.74m0.041% $1.7m
Carl Sottosanti
Executive VP6yrsUS$2.23m0.049% $2.1m
Todd George
Executive Vice President of Operations0yrsno datano data
Christine LaBombard
Senior VP & Chief Accounting Officer1.1yrsno data0.020% $867.2k
Richard Primus
Senior VP & Chief Information Officer0yrsno datano data
Frank Donaghue
Chief Compliance Officer & VP of Regulatory Affairs8.6yrsno datano data
Jennifer Weissman
Senior VP & Chief Marketing Officer4.3yrsno datano data
Eugene Clark
Senior Vice President of Human Resources14.5yrsno datano data
D. Schippers
Senior Vice President of Public Affairs & Government Relations0yrsno datano data

4.3yrs

Average Tenure

51yo

Average Age

Experienced Management: PENN's management team is considered experienced (4.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jay Snowden
CEO, President & Director0.08yrsUS$4.50m0.091% $3.9m
Ronald Naples
Independent Director6.7yrsUS$310.01k0.011% $463.2k
Peter Carlino
Chairman Emeritus0.7yrsUS$425.00k4.76% $202.5m
John Jacquemin
Independent Director25.1yrsUS$320.01k0.14% $5.9m
Barbara Shattuck Kohn
Lead Director0yrsUS$320.01k0.055% $2.3m
Jane Scaccetti
Independent Director4.8yrsUS$310.01k0.029% $1.2m
David Handler
Chairman0.7yrsUS$310.01k0.17% $7.2m
Saul Reibstein
Director1.9yrsUS$295.01k0.035% $1.5m

1.9yrs

Average Tenure

69.5yo

Average Age

Experienced Board: PENN's board of directors are not considered experienced ( 1.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 19.1%.


Top Shareholders

Company Information

Penn National Gaming, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Penn National Gaming, Inc.
  • Ticker: PENN
  • Exchange: NasdaqGS
  • Founded: 1972
  • Industry: Casinos and Gaming
  • Sector: Consumer Services
  • Market Cap: US$4.253b
  • Shares outstanding: 115.35m
  • Website: https://www.pngaming.com

Number of Employees


Location

  • Penn National Gaming, Inc.
  • 825 Berkshire Boulevard
  • Suite 200
  • Wyomissing
  • Pennsylvania
  • 19610
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PENNNasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDMay 1994
PN1DB (Deutsche Boerse AG)YesCommon SharesDEEURMay 1994

Biography

Penn National Gaming, Inc. owns and manages gaming and racing facilities, and operates video gaming terminals with a focus on slot machine entertainment. The company operates through four segments: Northeast, South, West, and Midwest. As of December 18, 2019, it operated 41 facilities in 19 jurisdictions. The company was formerly known as PNRC Corp. and changed its name to Penn National Gaming, Inc. in 1994. Penn National Gaming, Inc. was founded in 1972 and is based in Wyomissing, Pennsylvania. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 00:17
End of Day Share Price2020/02/18 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.