Procore signs multi-year strategic collaboration agreement with AWS
On Monday, PENN Entertainment Inc (NASDAQ: PENN) maintained its Hold rating by Benchmark, following a first-quarter performance that fell short of market expectations. The gaming company reported revenues of $1.67 billion, which did not meet the anticipated $1.70 billion consensus. Adjusted EBITDAR (earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs) also missed estimates, arriving at $329 million against the forecasted $351.5 million. According to InvestingPro data, PENN’s stock has declined over 21% in the past six months, reflecting market concerns about its performance. The company’s current market capitalization stands at $2.26 billion, with analysts setting price targets ranging from $16.50 to $30.
The company’s management has attributed the lower-than-expected results to a combination of severe winter weather during January and February, which they believe negatively impacted AEBITDAR by at least $10 million. Additionally, the absence of a one-time accounting benefit of $5 million, which was included in the previous year’s figures, also contributed to the shortfall. Despite these challenges, PENN observed a recovery in volumes during March, with improvement extending into April and early May. InvestingPro analysis indicates the company currently trades below its Fair Value, though it maintains a weak financial health score of 1.69 out of 5, primarily due to its significant debt burden and short-term liquidity concerns.
In the Interactive segment, there was a notable improvement, with AEBITDA losses decreasing to $89 million from $103 million in the last quarter of the previous year and $196 million in the first quarter of 2024. PENN has reaffirmed its goal for the Interactive segment to reach a break-even point in the fourth quarter of 2025 and to achieve positive AEBITDA in 2026.
The company’s standalone Hollywood iCasino application, operating in Pennsylvania and Michigan, continued to show strong performance, setting records for net gaming revenue and average monthly active users. However, the ESPN BET platform has not met the company’s expectations and has struggled to secure a significant position in the online sportsbook market, according to Benchmark’s analysis.
In other recent news, PENN Entertainment reported its financial results for the first quarter of 2025, missing earnings expectations with an EPS of -$0.25 against a forecasted -$0.19. The company’s revenue also fell short, coming in at $1.67 billion compared to the anticipated $1.71 billion. Despite these setbacks, PENN’s retail operations remained strong, generating $1.4 billion in revenue, and its Interactive segment showed significant year-over-year improvement in EBITDA losses. Mizuho (NYSE:MFG) Securities and Macquarie both adjusted their price targets for PENN Entertainment to $24, maintaining an Outperform rating. Mizuho noted that PENN’s property EBITDA matched its estimate, while Macquarie attributed a shortfall in EBITDAR to corporate legal fees and adverse weather conditions. PENN Entertainment also announced the nomination of two candidates proposed by HG Vora Capital Management to its Board of Directors, reflecting ongoing engagement with the firm. The company emphasized its commitment to returning capital to shareholders, including plans to repurchase at least $350 million of common stock in 2025.
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