Company Overview - PENN Entertainment, incorporated in Pennsylvania in 1982, is a leading multi-jurisdictional owner and manager of gaming and racing facilities, focusing on slot machine entertainment [12] - The company has a geographically widespread portfolio and operates video gaming terminal operations [12] Zacks Rank and Style Scores - PENN is currently rated 3 (Hold) on the Zacks Rank, indicating a neutral outlook [13] - The company has a VGM Score of B, reflecting a combination of value, growth, and momentum characteristics [13] - PENN's Value Style Score is also B, supported by attractive valuation metrics such as a forward P/E ratio of 25.8, which may appeal to value investors [13] Earnings Estimates and Performance - In the last 60 days, five analysts have revised their earnings estimates for PENN upwards, with the Zacks Consensus Estimate increasing from $0.65 to $0.69 per share for fiscal 2025 [13] - PENN has demonstrated an average earnings surprise of +13.5%, indicating a history of exceeding earnings expectations [13] Investment Consideration - With a solid Zacks Rank and strong Value and VGM Style Scores, PENN is suggested to be on investors' short lists for potential investment opportunities [14]

Group 1 - PENN Entertainment Inc shares have increased by 9%, reaching $19.20, the highest level since early March, following an upgrade from Citizens JMP from "market perform" to "outperform" with a price target of $24 [1] - The stock has been recovering from an early-April low of $13.25 and is now approaching its year-over-year breakeven level, with analysts evenly split on ratings [2] - There has been a 5.6% increase in short interest over the past two reporting periods, now accounting for 13.4% of the stock's total float, indicating a potential for short covering [3] Group 2 - The average trading pace suggests it would take shorts five days to buy back their positions, indicating a potential shift in market sentiment [3] - Options for PENN Entertainment are currently considered affordable, with a Schaeffer's Volatility Index (SVI) of 44%, ranking in the 3rd percentile of its annual range, suggesting low volatility expectations [3]

Company Overview - PENN Entertainment, incorporated in Pennsylvania in 1982, is a leading multi-jurisdictional owner and manager of gaming and racing facilities, focusing on slot machine entertainment [11] - The company has a geographically widespread portfolio, indicating a strong market presence [11] Zacks Rank and Style Scores - PENN is currently rated 3 (Hold) on the Zacks Rank, with a VGM Score of A, suggesting a solid overall performance [12] - The Momentum Style Score for PENN is B, with shares having increased by 13.7% over the past four weeks, indicating positive momentum [12] - Two analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.42 to $0.14 per share [12] Investment Potential - PENN's average earnings surprise stands at 13.5%, showcasing its ability to exceed earnings expectations [12] - With a strong Zacks Rank and high Momentum and VGM Style Scores, PENN is recommended for investors' consideration [13]

Company Overview - PENN Entertainment was incorporated in Pennsylvania in 1982 and became publicly traded in 1994, focusing on gaming and racing facilities with a strong emphasis on slot machine entertainment [11] - The company operates across multiple jurisdictions and has a diverse portfolio of gaming facilities [11] Zacks Rank and Style Scores - PENN is currently rated as 3 (Hold) on the Zacks Rank, indicating a neutral outlook [12] - The company has a VGM Score of A, reflecting strong overall performance across value, growth, and momentum metrics [12] - PENN's Value Style Score is B, supported by attractive valuation metrics such as a forward P/E ratio of 122.81, which may appeal to value investors [12] Earnings Estimates and Performance - In the last 60 days, two analysts have revised their earnings estimates higher for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.42 to $0.14 per share [12] - PENN has demonstrated an average earnings surprise of 13.5%, indicating a history of exceeding earnings expectations [12] Investment Consideration - With a solid Zacks Rank and strong Value and VGM Style Scores, PENN Entertainment is recommended for investors' consideration [13]

Financial Data and Key Metrics Changes - As of April 28, 2025, there were 150,800,295 shares of common stock outstanding [3] - The preliminary voting results indicated that the fiscal year 2024 compensation of named executive officers was not approved on an advisory basis [19] Business Line Data and Key Metrics Changes - No specific data on individual business lines was provided in the meeting [17] Market Data and Key Metrics Changes - No specific market data or key metrics changes were discussed during the meeting [17] Company Strategy and Development Direction and Industry Competition - The board recommended a vote for the second amendment to the 2022 long-term incentive compensation plan, indicating a focus on aligning executive compensation with company performance [10][11] - The company faced a nonbinding shareholder proposal regarding the evaluation of a smoke-free policy, reflecting industry trends towards health and safety in gaming environments [12][14] Management's Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during the meeting [17] Other Important Information - The meeting included five proposals, with the most notable being the election of directors and the ratification of the independent accounting firm [9][10] - The proposal for a report on the effects of a company-wide nonsmoking policy was not approved, indicating shareholder resistance to increased transparency on this issue [20] Q&A Session Summary Question: Were there any pertinent questions submitted by shareholders on the proposals? - There were no pertinent questions submitted by shareholders on these proposals [17]

Group 1 - PENN Entertainment is known for its strategic move into the online sports betting industry through the purchase and subsequent sale of Barstool Sports, which significantly boosted its stock price to over $120 per share [1] - The company has a history of engaging in various investment activities, including trading public equities and analyzing different sectors such as healthcare startups and telehealth [1] Group 2 - The article does not provide any specific financial data or performance metrics related to PENN Entertainment or the online sports betting industry [2][3]

Group 1 - Moretus Research provides high-quality equity research focused on U.S. public markets, aiming to deliver clarity, conviction, and alpha for serious investors [1] - The research framework identifies companies with durable business models, mispriced cash flow potential, and intelligent capital allocation, emphasizing a structured and repeatable approach [1] - Valuation methods are based on sector-relevant multiples tailored to each company's business model and capital structure, prioritizing comparability, simplicity, and relevance [1] Group 2 - Research coverage focuses on underappreciated companies experiencing structural changes or temporary dislocations, where disciplined analysis can yield asymmetric returns [1] - Moretus Research aims to elevate the standard for independent investment research by providing professional-grade insights and actionable valuation [1]

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The company's unaudited Q1 2025 financial statements show a swing to net income driven by a one-time gain [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) PENN Entertainment reported a 4.1% revenue increase to $1.67 billion and a net income of $111.5 million for Q1 2025 Consolidated Statements of Operations Highlights (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$1,672.5** | **$1,606.9** | **+4.1%** | | Operating Income (Loss) | $42.8 | $(21.4) | N/A | | Gain on financing arrangement | $215.1 | $— | N/A | | **Net Income (Loss)** | **$111.5** | **$(114.9)** | **N/A** | | Diluted EPS | $0.68 | $(0.76) | N/A | Consolidated Balance Sheet Highlights | Metric | March 31, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $591.6 | $706.6 | | Total Assets | $15,090.0 | $15,261.7 | | Total Liabilities | $12,120.6 | $12,403.3 | | Total Stockholders' Equity | $2,969.4 | $2,858.4 | Consolidated Statements of Cash Flows Highlights (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $41.9 | $(68.7) | | Net cash used in investing activities | $(135.9) | $(47.3) | | Net cash used in financing activities | $(16.2) | $(50.1) | [Notes to the Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail segment performance, highlighting strong Interactive segment growth and significant commitments like the ESPN agreement - The company operates through five reportable segments: Northeast, South, West, Midwest, and Interactive, with the latter including all online operations[32](index=32&type=chunk)[34](index=34&type=chunk) Revenue by Segment (Q1 2025 vs Q1 2024) | Segment (in millions) | Q1 2025 Revenue | Q1 2024 Revenue | Change (%) | | :--- | :--- | :--- | :--- | | Northeast | $680.9 | $684.7 | -0.6% | | South | $288.3 | $298.5 | -3.4% | | West | $129.7 | $128.8 | +0.7% | | Midwest | $282.9 | $291.2 | -2.9% | | **Interactive** | **$290.1** | **$207.7** | **+39.7%** | - Under the Sportsbook Agreement, PENN pays ESPN **$150.0 million annually** and has issued warrants, with related Q1 2025 expenses totaling **$51.7 million**[105](index=105&type=chunk)[109](index=109&type=chunk) - During Q1 2025, the company repurchased **1,413,882 shares** of its common stock for **$25.0 million** under its authorized share repurchase program[114](index=114&type=chunk) Adjusted EBITDAR by Segment (Q1 2025 vs Q1 2024) | Segment (in millions) | Q1 2025 Adj. EBITDAR | Q1 2024 Adj. EBITDAR | Change ($) | | :--- | :--- | :--- | :--- | | Northeast | $194.2 | $202.6 | $(8.4) | | South | $103.3 | $113.5 | $(10.2) | | West | $45.7 | $45.9 | $(0.2) | | Midwest | $113.8 | $117.0 | $(3.2) | | **Interactive** | **$(89.0)** | **$(196.0)** | **$107.0** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 4.1% revenue increase driven by the Interactive segment, a return to profitability, and ongoing development projects [Executive Overview](index=34&type=section&id=Executive%20Overview) The company's strategy focuses on leveraging its digital assets and retail casinos, supported by major development projects - The company's strategy is centered on leveraging its partnership with ESPN and ownership of theScore to expand its digital footprint and create cross-sell opportunities[156](index=156&type=chunk) - Major development projects are in progress, including casino relocations and hotel additions, with **GLPI committing up to $575 million in funding**[158](index=158&type=chunk) - A new development project was announced to relocate the Ameristar Council Bluffs casino to a land-based property with an estimated cost of **$180-$200 million**[159](index=159&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Q1 2025 revenue grew 4.1% to $1.67 billion, with a $215.1 million non-cash gain driving net income to $111.5 million Consolidated Revenue and Net Income (Q1 2025 vs Q1 2024) | Metric (in millions) | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $1,672.5 | $1,606.9 | +$65.6 | +4.1% | | Net Income (Loss) | $111.5 | $(114.9) | +$226.4 | N/A | - The increase in gaming revenue was primarily driven by the **Interactive segment**, which benefited from iCasino growth and reduced promotional expenses for ESPN BET[178](index=178&type=chunk) - A **non-cash gain of $215.1 million** was recognized related to a 2021 financing arrangement for COVID-19 business interruption claims[188](index=188&type=chunk) - General and administrative expenses increased by $14.1 million, primarily due to **$7.7 million of legal and advisory costs** related to a proxy campaign[184](index=184&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity through operating cash flow and credit facilities, funding capital expenditures and share repurchases Cash Flow Summary (Q1 2025 vs Q1 2024) | Cash Flow Activity (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash from (used in) Operating Activities | $41.9 | $(68.7) | | Net cash used in Investing Activities | $(135.9) | $(47.3) | | Net cash used in Financing Activities | $(16.2) | $(50.1) | - For fiscal year 2025, the company anticipates total capital expenditures of approximately **$730 million**[223](index=223&type=chunk) - In Q1 2025, the company repurchased **$25.0 million** of its common stock, with an additional **$10.0 million** repurchased post-quarter[231](index=231&type=chunk) - As of May 9, 2025, the company had **$874.6 million in available borrowing capacity** under its Amended Revolving Credit Facility[66](index=66&type=chunk)[226](index=226&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company's primary market risks stem from interest rate fluctuations on its variable-rate debt and foreign currency translation - The company is exposed to interest rate risk on its **$1.5 billion of variable-rate debt** outstanding as of March 31, 2025[249](index=249&type=chunk) - PENN is exposed to foreign currency translation risk from its Canadian subsidiary, theScore, resulting in an unrealized loss of **$0.3 million in Q1 2025**[252](index=252&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Management concluded that the Company's **disclosure controls and procedures were effective** as of March 31, 2025[253](index=253&type=chunk) - **No material changes** were made during Q1 2025 that affected the company's internal control over financial reporting[254](index=254&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company faces a lawsuit from HG Vora Capital Management concerning board reduction and proxy statements, which it deems without merit - On May 7, 2025, **HG Vora Capital Management filed a lawsuit** against PENN and its board, alleging improper board reduction and misleading proxy statements[257](index=257&type=chunk) - The lawsuit seeks to invalidate the board reduction and requests injunctive relief and damages; the company believes the **claims are without merit**[257](index=257&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) Key risks include sensitivity to consumer spending, shareholder activism from the HG Vora proxy contest, and associated legal challenges - The company's business is sensitive to reductions in **discretionary consumer spending**, which can be affected by economic downturns and inflation[259](index=259&type=chunk) - **Shareholder activism**, such as the current proxy solicitation by HG Vora, poses a risk of increased costs and business disruption[261](index=261&type=chunk)[262](index=262&type=chunk) - The company is subject to **litigation from HG Vora** related to the 2025 annual meeting, which could result in substantial costs and adverse regulatory implications[263](index=263&type=chunk)[264](index=264&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 1.4 million shares for approximately $26.4 million in Q1 2025 under its authorized program Share Repurchases in Q1 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | Value (in millions) | | :--- | :--- | :--- | :--- | | Jan 2025 | — | $— | $— | | Feb 2025 | — | $— | $— | | Mar 2025 | 1,497,039 | $17.63 | ~$26.4 | - Of the shares purchased in March, 1,413,882 were part of the publicly announced program, leaving **$724.6 million available** under the repurchase authorization[265](index=265&type=chunk)[266](index=266&type=chunk) [Other Information](index=54&type=section&id=Item%205.%20Other%20Information) No new executive 10b5-1 trading plans were adopted in Q1 2025, and a new employment agreement was executed for the Chief Strategy Officer - No directors or executive officers adopted, modified, or terminated a **Rule 10b5-1 trading plan** during the first quarter of 2025[267](index=267&type=chunk) - A new three-year employment agreement was executed with EVP Christopher Rogers, with an annual base salary of **$824,000** and a target bonus of **125% of base salary**[268](index=268&type=chunk) [Exhibits](index=54&type=section&id=Item%206.%20Exhibits) Filed exhibits include a key executive employment agreement, master lease amendments, and required Sarbanes-Oxley certifications - Key exhibits filed include the Executive Agreement for Christopher Rogers, amendments to the 2023 Master Lease, and **CEO/CFO certifications** (Sections 302 and 906)[271](index=271&type=chunk)

PENN Entertainment, Inc. (PENN) reported a narrower-than-expected loss in first-quarter 2025 results. Meanwhile, the top line missed the Zacks Consensus Estimate but increased on a year-over-year basis.Following the results, the company’s shares declined 2.7% during yesterday’s trading hours.Despite severe weather earlier in the year, the company showed resilience during the first quarter. Gaming volumes improved in March and remained stable through April and early May. PENN’s Interactive segment achieved r ...

Core Insights - PENN Entertainment reported $1.67 billion in revenue for Q1 2025, a 4.1% year-over-year increase, with an EPS of -$0.25 compared to -$0.79 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $1.7 billion by 1.74%, while the EPS exceeded the consensus estimate of -$0.29 by 13.79% [1] Revenue Performance by Segment - Northeast segment revenue was $680.90 million, slightly below the estimated $683.75 million, reflecting a year-over-year decrease of 0.6% [4] - South segment revenue reached $288.30 million, exceeding the estimated $287.13 million, but showing a year-over-year decline of 3.4% [4] - West segment revenue was $129.70 million, surpassing the estimated $127.21 million, with a year-over-year increase of 0.7% [4] - Midwest segment revenue was $282.90 million, below the estimated $286.12 million, indicating a year-over-year decrease of 2.9% [4] - Interactive segment revenue was $290.10 million, significantly higher than the estimated $312.88 million, marking a year-over-year increase of 39.7% [4] - Other segment revenue was $5.30 million, below the estimated $6.15 million, reflecting a year-over-year decline of 11.7% [4] - Intersegment eliminations reported a revenue of -$4.70 million, better than the estimated -$7.50 million, with a year-over-year change of -53% [4] Stock Performance - PENN Entertainment's shares have returned -3.5% over the past month, contrasting with the Zacks S&P 500 composite's increase of 11.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]