Should You Buy the Dip in Penn National Gaming? -Breaking
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Gambling is seeing a resurgence thanks to the lifting of COVID-19 travel restrictions as well as social distancing directives. Penn National shares have dropped in price recently, as the company’s consensus earnings estimate for the quarter was not met and the company faces lawsuits. So, given the company’s stretched valuation, is its stock a Buy on its recent dip? Continue reading to learn more. Penn National Gaming, Inc. (NASDAQ) manages racing and gaming properties, and runs video gaming terminals. Wyomissing, Pa.-based company operates social gambling, bingo, sports betting and online casinos under the iGaming brand in Pennsylvania and Michigan. PENN shares fell 21.1% on November 4, after it reported third quarter earnings that were below the consensus estimates. Jay Snowden, the CEO, pointed to the continued spread of COVID-19 Delta variant and Hurricane Ida as reasons for operational disruptions. The stock’s sell-off was also driven by controversies surrounding Barstool Sports Founder Dave Portnoy. PENN owns 36% of Barstool Sports.
The stock’s price has fallen 13.7% over the last five trading days to close at $61.76.
PENN’s weak bottom-line is reflected in its third-quarter earnings report. Its net income decreased 39% over its previous year to $86.10 million during the September 30-end quarter. PENN’s EPS has decreased 44.1% year-over-year to $0.52, which missed the $0.89 consensus EPS estimate by 41.5%. However, PENN’s total revenues increased 33.8% year-over-year to $1.51 billion.
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