- PENN
+0.07%
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PENN Entertainment (PENN) is back in focus as investors look ahead to its upcoming June quarter earnings report on August 6, with Wall Street expecting higher revenue and year over year earnings growth.
PENN Entertainment’s recent share price has held around $20.53, with a 90 day share price return of 18.88% and a year to date share price return of 38.25%. The 1 year total shareholder return of 15.34% contrasts with weaker 3 and 5 year total shareholder returns, suggesting momentum has improved in the short term even as longer term investors remain under water.
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Given PENN Entertainment’s strong short term rebound alongside weaker multi year returns, are you seeing a real shift in the underlying business, or a sentiment swing that could leave the valuation out of step with fundamentals next?
Most Popular Narrative: 74.2% Undervalued
At a last close of $20.53, the most-followed narrative on PENN Entertainment points to a much higher fair value, which is what anchors the view that the stock looks heavily discounted.
PENN’s stock has been a disaster for years. EV is way down. With fundamentals of its casinos solid, write offs of mistakes behind them, and valuation at a nadir, the opportunity for a major upside breakout is apparent. The Company is sizable, $7 billion in revenues and $1.7 billion in EBITDAR, its not going away. In fact, a hostile bid or management takedown is not impossible. Assets are top notch, even if management is not. Expect a major upswing in earnings in 2026 with an accompanying share price rise. I place fair value at about $30 per share……..That would be 7 times 2027 EBITDA to Enterprise Value
This narrative from Frosty555 leans heavily on PENN Entertainment’s current revenue base, projected earnings power, and a future earnings multiple that sits well above what the market is pricing in today. The key question it raises is how those assumptions stack up once you see the full set of numbers and timelines behind that valuation call.
Result: Fair Value of $79.65 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, PENN Entertainment still carries clear risks, including ongoing net losses of $957.2 million and a recent 30 day share price slide of about 4.5%.
