Casino, sports betting and entertainment operator PENN Entertainment (NASDAQ:PENN) met Wall Street’s revenue expectations in Q4 CY2024, with sales up 19.6% year on year to $1.67 billion. Its non-GAAP loss of $0.44 per share was 17.6% below analysts’ consensus estimates.
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PENN Entertainment (PENN) Q4 CY2024 Highlights:
- Revenue: $1.67 billion vs analyst estimates of $1.67 billion (19.6% year-on-year growth, in line)
- Adjusted EPS: -$0.44 vs analyst expectations of -$0.37 (17.6% miss)
- Adjusted EBITDA: $165.2 million vs analyst estimates of $321.4 million (9.9% margin, 48.6% miss)
- Operating Margin: -2.9%, up from -10.2% in the same quarter last year
- Market Capitalization: $3.05 billion
Jay Snowden, Chief Executive Officer and President, said: “PENN’s fourth quarter property-level operating results reflect solid performance, as properties not impacted by new supply generated nearly 3% year-over-year revenue growth. Despite well-known, customer friendly sports betting outcomes during the quarter, our Interactive segment delivered significant year-over-year improvements in revenue and Adjusted EBITDA driven by our disciplined promotional strategies and accelerated growth in our online Casino business. The success in our iCasino business is bolstered by the continued strong momentum from the recent launches of our standalone Hollywood Casino app in Pennsylvania and Michigan. We are excited by the opportunities that lie in front of us in 2025 and into 2026 in all aspects of our business and are announcing this morning our intent to repurchase at least $350 million of shares this year.
Company Overview
Established in 1982, PENN Entertainment (NASDAQ:PENN) is a diversified American operator of casinos, sports betting, and entertainment venues.
Casino Operator
Casino operators enjoy limited competition because gambling is a highly regulated industry. These companies can also enjoy healthy margins and profits. Have you ever heard the phrase ‘the house always wins’? Regulation cuts both ways, however, and casinos may face stroke-of-the-pen risk that suddenly limits what they can or can't do and where they can do it. Furthermore, digitization is changing the game, pun intended. Whether it’s online poker or sports betting on your smartphone, innovation is forcing these players to adapt to changing consumer preferences, such as being able to wager anywhere on demand.
Sales Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, PENN Entertainment grew its sales at a sluggish 4.4% compounded annual growth rate. This fell short of our benchmark for the consumer discretionary sector and is a rough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. PENN Entertainment’s recent history shows its demand slowed as its annualized revenue growth of 1.4% over the last two years is below its five-year trend. Note that COVID hurt PENN Entertainment’s business in 2020 and part of 2021, and it bounced back in a big way thereafter. 
PENN Entertainment also breaks out the revenue for its most important segment, Northeast Region. Over the last two years, PENN Entertainment’s Northeast Region revenue (casinos, hotels) averaged 4.1% year-on-year growth. This segment has outperformed its total sales during the same period, lifting the company’s performance.
This quarter, PENN Entertainment’s year-on-year revenue growth was 19.6%, and its $1.67 billion of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 5.4% over the next 12 months. While this projection suggests its newer products and services will spur better top-line performance, it is still below average for the sector.
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Cash Is King
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
PENN Entertainment broke even from a free cash flow perspective over the last two years, giving the company limited opportunities to return capital to shareholders.
Key Takeaways from PENN Entertainment’s Q4 Results
We struggled to find many positives in these results. Revenue was just in line and EPS missed. Overall, this was a softer quarter. The stock traded down 1.7% to $20.05 immediately following the results.
PENN Entertainment’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.
