Core Insights - The legalization of sports betting in the U.S. has led to significant market growth, with over $150 billion wagered in 2025, but profitability remains a challenge for many operators [1] Company Summaries 1. DraftKings - DraftKings is the closest to achieving profitability in the digital sports betting space, posting $0.16 in annual EPS in 2025, marking its first year of profitability after five years of losses [12] - Revenue reached $5.46 billion, with quarterly earnings growth of 185% year-over-year, indicating strong operational performance [12] - The stock has seen a 26% decline over the past year, but analysts project a fair value of $45, suggesting a 47% upside if the company can maintain its profitability [13][14] 2. Flutter Entertainment - Flutter Entertainment, the parent company of FanDuel, is the largest operator in the group with a market cap of $30.6 billion and revenue of $15.4 billion [10] - The company reported $3.82 in annual EPS for 2025, down 37% from the previous year, but remains profitable [10] - Analysts see a fair value of $285 for the stock, implying a 63% upside, supported by its global diversification and established profitability [11] 3. Caesars Entertainment - Caesars operates over 50 casino properties and runs Caesars Sportsbook, but reported an annual EPS of -$0.95 in 2025, despite an improvement from -$1.26 in 2024 [7] - The stock has dropped 35% over the past year, trading at $22.37, with analysts maintaining a target of $32, indicating a potential 43% upside if the company can stabilize its digital losses [8] 4. MGM Resorts - MGM Resorts is the only company on the list with a positive one-year performance, up 3.7%, generating $17.3 billion in revenue [5] - The profit margin is low at 0.4%, and earnings fell 70% year-over-year in Q3 2025, indicating operational stress [6] - The stock trades near its 200-day moving average at $34.10, with a modest upside to the $42 analyst target [6] 5. Penn Entertainment - Penn Entertainment reported an annual loss of -$0.59 in 2025, an improvement from -$1.62 in 2024, but remains unprofitable [3] - The stock trades at 0.3x sales and below book value, suggesting market skepticism regarding its ESPN partnership [4] - Analysts have set a target of $19 for the stock, implying a 33% upside, but the company needs to demonstrate its ability to convert ESPN's reach into profitable customer acquisition [4]

Core Viewpoint - The gaming industry is viewed positively, particularly when it intersects with real estate, indicating a potential for growth and investment opportunities in this sector [1]. Group 1: Company Insights - VICI Properties is highlighted as a current investment position, suggesting confidence in its performance and potential for returns [1]. - Red Rock Resorts is identified as a bullish investment opportunity, indicating optimism about its future growth prospects [1]. - PENN is mentioned as a recent focus for analysis, suggesting it may present additional investment opportunities worth exploring [1]. Group 2: Investment Strategy - The analysis approach is fundamentally driven, focusing on identifying undervalued stocks that possess growth potential, which aligns with value investing principles [1].

Core Viewpoint - PENN Entertainment, Inc. will release its fourth quarter financial results for 2025 on February 26, 2026, at 7:00 a.m. ET, followed by a conference call at 8:00 a.m. ET, which is open to the public [1]. Group 1: Financial Results Announcement - The financial results will be available at 7:00 a.m. ET on February 26, 2026 [1]. - A conference call and webcast will follow at 8:00 a.m. ET, accessible to the general public [1]. Group 2: Conference Call Details - The conference call can be accessed at 785-424-1789 with conference ID: PENN, and participants are advised to call five minutes in advance [2]. - The live call can also be accessed online at www.pennentertainment.com, with a recommendation to allow 15 minutes for registration and software installation [2]. - A replay of the call will be available for thirty days on the company's website [2]. Group 3: Company Overview - PENN Entertainment operates in 28 jurisdictions across North America, with a diversified portfolio that includes casinos, racetracks, and online sports betting and iCasino offerings [3]. - The company focuses on organic cross-sell opportunities, supported by its retail casinos, sports media assets, and a proprietary digital sports betting and iCasino platform [3]. - PENN's customer loyalty program, PENN Play™, has over 33 million members, providing unique rewards and experiences [3].

Group 1: Stock Performance - PENN Entertainment's shares increased by 5.4% to $14.58 in the last trading session, contrasting with a 3.7% loss over the past four weeks [1] - The stock's rise was accompanied by a higher-than-average trading volume, indicating strong investor interest [1] Group 2: Organizational Changes - The company's updated organizational structure aims to reduce overhead and enhance decision-making in its casino and digital businesses [2] - The elimination of duplicative executive roles and implementation of tighter cost controls reflect a commitment to efficiency and disciplined capital allocation [2] - These changes are expected to bolster investor confidence in PENN's cash flow generation and long-term performance [2] Group 3: Earnings Expectations - PENN is projected to report a quarterly loss of $0.21 per share, which is a year-over-year increase of 52.3% [3] - Revenue expectations stand at $1.75 billion, marking a 5% increase from the same quarter last year [3] - A negative trend in earnings estimate revisions has been noted, with the consensus EPS estimate revised 20% lower over the past 30 days [4] Group 4: Industry Context - PENN Entertainment holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [5] - In comparison, Nintendo Co. (NTDOY), another company in the gaming industry, saw a 2.2% increase in its stock price but has returned -9.2% over the past month [5][6]

Core Insights - PENN Entertainment, Inc. announced a new corporate organizational structure to align with its strategic priorities, focusing on digital assets in Canada and the Hollywood iCasino product in the U.S. [1] Group 1: Corporate Strategy - The restructuring aims to leverage the core retail casino business and enhance the overall omnichannel business model [1]

Core Insights - The U.S. online betting industry is transitioning from growth to profitability, with investors focusing on execution and balance-sheet discipline, highlighting a competitive landscape between DraftKings Inc. (DKNG) and PENN Entertainment, Inc. (PENN) [1][2] DraftKings (DKNG) - DraftKings operates as a pure-play digital operator, emphasizing scale, technology, and customer engagement to enhance long-term earnings potential [2][3] - The company is experiencing improving momentum with accelerating handle growth, stronger customer retention, and increased parlay mix, which are expected to support higher sportsbook margins over time [3] - DraftKings is expanding media partnerships and product initiatives while maintaining disciplined capital allocation, including a larger share repurchase authorization [4] - The company continues to invest in new initiatives and technology, which may affect near-term profitability, leading to uneven margins compared to peers [6] - DraftKings faces inherent volatility in sportsbook results, which can significantly impact revenue and EBITDA, creating challenges for earnings visibility [5] PENN Entertainment (PENN) - PENN has strategically reset its digital operations by exiting the ESPN BET partnership and focusing on owned assets like theScore Bet and Hollywood iCasino, which simplifies the business and reduces marketing costs [7] - The company is witnessing strong momentum in iCasino, which is increasingly viewed as a profit engine, with record revenue driven by cross-selling from online sports betting [8][9] - PENN's regional casino business provides stable cash flow and differentiates it from digital-only competitors, with strong performance in several markets and a visible development pipeline [10] - Execution risk in the Interactive segment remains a concern, particularly with the transition away from ESPN BET, which introduces uncertainty around customer retention [11] - PENN's diversified structure and focus on profitability position it favorably compared to DraftKings, especially as the industry matures [24] Stock Performance & Valuation - DraftKings shares have underperformed compared to PENN over the past six months [12] - DraftKings is trading at a premium on a forward 12-month price-to-sales (P/S) ratio compared to PENN [16] - The Zacks Consensus Estimate for DKNG's 2026 earnings implies a year-over-year improvement of 100.4%, while PENN's estimate suggests a 116.4% improvement [18][21] Conclusion - PENN Entertainment is currently better positioned than DraftKings due to its balanced business model, digital reset, and stable cash flow from regional casinos, while DraftKings remains more exposed to sportsbook volatility and investment needs [24]

Core Viewpoint - Jackpot Digital Inc. has finalized agreements to install its dealerless electronic poker gaming solutions, Jackpot Blitz®, at two PENN Entertainment properties in Mississippi, marking a significant step in its expansion within regulated gaming markets [1][2][4]. Group 1: Company Developments - The installations of Jackpot Blitz® are scheduled for the first quarter of 2026 and represent the first deployment under the Master Agreement with PENN Entertainment [2]. - Jackpot Digital has recently received its Mississippi gaming license, allowing it to operate within the state [2]. - The company is expanding its global footprint, already licensed in multiple jurisdictions including Maine, Mississippi, and U.S. Virgin Islands, as well as various international and tribal casinos [4]. Group 2: Product Features and Market Position - Jackpot Blitz® enhances the poker experience through immersive digital gameplay, operational efficiency, and innovative features appealing to both experienced and new players [3]. - The dealerless ETG platform allows casinos to reduce operating costs while maximizing uptime and game availability [3]. - The company positions itself as a positive disruptor in the casino business, focusing on providing efficient, cost-effective, and revenue-generating alternatives to traditional live-dealer table games [5].

Core Viewpoint - PENN Entertainment has officially opened the second hotel tower at M Resort Spa Casino in Las Vegas, marking a significant expansion of its capacity and enhancing its offerings for guests and group business [1][4]. Group 1: Project Details - The new hotel tower nearly doubles the capacity of M Resort, increasing the total to 765 rooms and suites [2]. - The development includes a 15,000 square foot Montese Ballroom, which will enhance the total indoor and outdoor conference and event space to over 100,000 square feet [2]. - The expansion is expected to create 120 new jobs at M Resort [2]. Group 2: Financial Aspects - On November 3, 2025, PENN received $150 million in funding from Gaming and Leisure Properties, Inc. at a 7.79% capitalization rate for the project [4]. - The new hotel tower is the second of PENN's growth projects to open, following the completion of the Hollywood Casino Joliet in August 2025 [5]. Group 3: Future Developments - Additional projects are on schedule and on budget, including the new land-based Hollywood Casino Aurora in Illinois and a hotel tower at Hollywood Casino Columbus, both expected to open in late Q2 2026 [5]. - The relocation of Hollywood Casino Council Bluffs is anticipated in Q4 2027 or early 2028 [5]. Group 4: Company Overview - PENN Entertainment operates in 28 jurisdictions across North America, with a diversified portfolio of casinos, racetracks, and online sports betting and iCasino offerings [8]. - The company focuses on organic cross-sell opportunities, supported by its market-leading retail casinos and technology [8]. - PENN's customer loyalty program, PENN Play™, has over 33 million members [9].

Core Viewpoint - PENN Entertainment has successfully rebranded its online sports betting platform to theScore Bet and launched it in Missouri, expanding its presence to 21 U.S. jurisdictions [1][2]. Group 1: Rebranding and Launch - TheScore Bet is now live in 21 U.S. jurisdictions, offering a comprehensive menu of wagering options and innovative features [2]. - The rebranding process was seamless, allowing existing customers to access their accounts without any disruption [1]. - The launch in Missouri coincides with the opening of retail sportsbooks at PENN's three properties in the state [4]. Group 2: Product Features and Integration - TheScore Bet app is integrated with theScore media app, providing real-time updates, stats, and personalized content feeds, enhancing the user experience [2]. - The platform aims to create a strong connection with fans, similar to its success in Ontario, by offering rewards, promotions, and engaging content [3]. Group 3: Company Overview - PENN Entertainment operates in 28 jurisdictions across North America, with a diversified portfolio that includes casinos, racetracks, and online sports betting [5]. - The company emphasizes organic cross-sell opportunities and has a proprietary digital sports betting and iCasino platform [5].

Core Insights - Penn Entertainment has ended its exclusive U.S. online sports betting partnership with ESPN earlier than expected, effective December 1, 2025, after mutual agreement due to missed market share goals [2][3] Company Overview - Penn Entertainment operates a portfolio of land-based casino and racetrack properties across multiple states, alongside significant digital gaming and sports-betting platforms, with a market capitalization of approximately $2 billion [3] Partnership Details - The partnership with ESPN, initiated in August 2023, was a 10-year deal costing Penn $150 million annually plus stock warrants for the rights to the ESPN BET brand [2] - ESPN contributed nearly 3 million users to Penn's platform, but both parties agreed to amicably wind down the partnership [2][3] Stock Performance - Over the past 52 weeks, PENN stock has declined by 29%, currently trading down 34% from its 52-week high of $23.08 [4] - Year-to-date, the stock is down approximately 23%, with a recent 6.5% decline in just the past five days due to strategic moves like the early termination of the ESPN deal [4] - PENN stock is trading at a discount to industry peers at 0.32 times forward sales [5]