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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Penn Entertainment, Inc. (XNAS:PENN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PENN
Name:
PENN Entertainment, Inc. (XNAS:PENN)
Sector:
159.30M
Industry:
Resorts & Casinos
CEO:
Mr. Jay Snowden
Total Employees:
21,973
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -51.16% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PENN ENTERTAINMENT, INC.(PENN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RESORTS & CASINOS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
31.3
One Month Price Target:
$31.69
Six Month Price Target :
$33.65
Likely Price in One Year's Time:
Ticker:
$36.
Likely Trading Range Today Under (Normal Volatility)
$31.06
Price Upper limit ($) :
$31.68
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$27.63
This week:
$23.09
This month :
$14.88
Other Primary facts
Market Cap:
4.89B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
158.56M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
34.8%
-44.8%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$48.32
$40.44
$14.28
$22.16
Medium risk (<10%) entry points
Buy Call
Sell Call
$37.87
Buy Put:
Sell Put:
$36.18
$24.71
$26.42
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PENN
Sharpe Ratio:
3.49%
Comparison:
PENN, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 25.09% higher than the industry
& ratio is 53.33% higher than the market/S&P 500 average
Average Returns/Yield of
PENN
Daily returns:
0.21%
Weekly returns:
1.06%
Monthly returns:
4.24%
Yearly returns:
33.63%
Comparison of returns:
Average annual returns/yield (last 3 years) is 51.34% above industry average
Classification:
PENN, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.91
Statistical test of Returns:
PENN has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
5.81%
Weekly Volatility:
13.00%
Monthly Volatility:
26.00%
Yearly Volatility:
90.08%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.14%
Volatility in last five trading days has been -63.24% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-11.73%
Weekly VaR:
-26.23%
Monthly VaR:
-52.46%
How Much Can the price of
PENN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-44%
Worst case (decline):
>85%
This translates to price declining to:
$17.54
This translates to price declining to:
$4.70
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
PENN is a 270.23% riskier investment compared to the market/S&P 500 & is 217.18% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 30.48% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PENN
Beta in relation to market/S&P 500--2.23
Expected beta in 1 year's time:
1.338
Expected beta in 3 year's time:
1.892
Unlevered (debt free) Beta:
0.673
Beta in relation to Nasdaq (XNAS):
1.669
Beta in relation to all global stocks::
1.422
Beta Comparison & Analysis
Beta of competitors/peers::
1.448
Beta is 54.23% higher than peers
Average Industry Beta:
2.078
Beta is 7.47% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
14.71%
Sustainable growth rate is -50.92% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.324
Alpha is 99.73% above industry average alpha yield
Alpha is 2066% higher than market/& is unsustainably high
Analysis of Cost of Capital of
PENN
Equity cost of capital:
0.184
Equity cost of capital is 6.12% above industry mean WACC
Unlevered (without debt) cost of capital:
5.56%
Before-tax cost of debt:
4.52%
After-tax cost of debt:
3.57%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.57%
WACC is -12.75% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$39.07
Revenue growth rate per share of (3Y):
1.26
Annual revenue growth rate is -96.28% below industry average
EPS:
$2.17
Expected Annual growth rate of EPS (3Y):
84.59%
Expected future EPS growth rate is 413.12% higher than the Resorts & Casinos industry
Free cash flow (FCF) per share:
$3.77
-
-
Debt per share
$79.79
EBITDA per share
$9.43
Valuation Analysis Today of
PENN
P/E Ratio:
26.9
P/E Ratio of Competitors/Peers:
21.89
P/E ratio is 22.88% higher than main peers & is -35.80% lower than the industry
Stock price/value with industry average P/E ratio: $90.91
PENN is -65.57% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.8
Price to sales ratio is -67.99% below the industry mean
P/B (Price to book value ratio):
1.26
Price to free cash flow: 8.29
Price to free cash flow ratio is -52.09% lower than the industry
Net income growth rate (3Y):
175.32%
Net income growth rate is -366.32% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
320.03%
Net debt to equity ratio:
283.00%
Debt to assets ratio:
70.01%
Net debt to assets ratio:
61.91%
Debt-to-asset ratio is -4.25% below industry average
Ability to repay debt:
Interest coverage ratio:
2.54
Interest coverage ratio is -51.77% less than industry average
Looking forward:
Debt growth rate:
-31.45%
Annual debt growth is -102% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.49%
Analysis of Key Statistics
Correlation of price movement with the market:
0.5
Statistical significance of correlation:
PENN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.569
Stock price is -12.23% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.569
Correlation of price movement with Nasdaq (^IXIC):
-0.073
Covariance of price movement with the market:
-0.247
Kurtosis
12.753
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.189
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
PENN
Gross Profit Margin Ratio:
183%
Operating Profit Margin Ratio:
18.32%
Operating profit margin is 149.99% higher than the industry
Net Profit Margin Ratio:
183%
Effective Tax Rate:
27.64%
Effective tax rate is -33.11% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
9.65%
Return on equity (ROE) is -54.17% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.11%
Return on assets (ROA) is -45.16% lower than the industry
Financial Leverage:
3.3x
Current Ratio:
1.88
Current ratio is -15.11% below industry average
Cash Conversion Cycle (days):
5.9
Cash conversion cycle is -85.72% below industry average
The remaining useful life of property plant & equipment is: 7.9 years
Stock based compensation to net income ratio:
4.46%
In-depth Efficiency Analysis
Revenue generated per employee:
281.9K
Each employee generates 8% more revenue than industry average revenue per employee
EBITDA generated per employee:
68.1K
Each employee generates -4% less EBITDA than industry average revenue per employee
Profit generated per employee:
17.4K
Each employee generates -20% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
7.2K
Each employee generates -27% less free cash flow than industry average revenue per employee
Assets/Capital per employee
726.3K
Each employee generates -27% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PENN
MATTEL, INC. (XNAS:MAT)
GENTEX CORPORATION (XNAS:GNTX)
CROCS, INC. (XNAS:CROX)
CHURCHILL DOWNS INCORPORATED (XNAS:CHDN)
BRP Inc. (XNAS:DOOO)
FOX FACTORY HOLDING CORP. (XNAS:FOXF)
REYNOLDS CONSUMER PRODUCTS INC. (XNAS:REYN)
TEXAS ROADHOUSE, INC. (XNAS:TXRH)
WYNN RESORTS, LIMITED (XNAS:WYNN)
Current Analyst Ratings
Strong buy�4%
Buy�21%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
6.19B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
3.36B
2.84B
-
1.32B
1.32B
-
381.40M
1.70B
1.00M
587.80M
380.90M
1.50B
1.14B
381.50M
526.80M
145.60M
381.50M
Statement of Cash Flow
Date:
Period:
118.20M
Differed Income Tax :
22.90M
Stock Based Compensation :
17.00M
Change in Working Capital :
- 48400.00K
Accounts Receivables:
54.20M
Other Working Capital:
22.90M
Other Non-Cash Items:
63.60M
Net Cash Provided by Operating Activities:
224.90M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
1.81B
-
1.81B
122.90M
-
184.60M
2.11B
10.77B
2.85B
1.86B
256.20M
-
219.20M
15.96B
-
18.07B
45.50M
341.60M
-
-
735.80M
1.12B
12.65B
130.30M
13.00B
-
14.12B
1.70M
- 15900.00K
- 18600.0K
3.97B
March 31, 2022 at 6:00:00 AM
5.06B
3.95B
18.07B
-
12.99B
11.2B
-
- 39600.00K
- 39600.00K
- 62000.00K
-
- 175100.00K
-
- 2100.00K
- 239200.00K
- 900.00K
- 239200.00K
-
-
224.90M
- 65600.00K
159.30M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
PENN
2023
2024
2025
2026
2027
$36.18
$82.06
$94.37
$108.54
$124.82