Sep. 4 at 12:05 PM
$PENN Retail casinos are improving. PENN’s Q2 retail revenue reached
$1.5B, with Segment Adjusted EBITDAR of
$517M, a 34.4% margin. Nine properties posted Q2 revenue/EBITDAR records.
Interactive is getting much healthier. The Interactive segment still lost
$9.5M in Q2, but that was a
$52.5M year-over-year improvement. Management says the U.S. iCasino business achieved record quarterly revenue.
Deleveraging is important. PENN had about
$887M cash and
$1.9B traditional net debt at June 30. Management’s 2026 plan calls for significant debt reduction.
The stock is already pricing in considerable risk. At
$17.20, PENN’s equity value is only about
$2.3B, while enterprise value is roughly
$12.4B. The interesting part of PENN is that you’re essentially getting a large regional casino portfolio plus an improving digital business at a relatively modest equity valuation. If management gets Interactive to sustained profitability and continues deleveraging,
$25+ becomes quite realistic.
