2024-05-18 09:00:00 ET
Summary
- PENN has unfortunately underperformed expectations with the stock declining by -32%, well behind the wider market at +20% since the launch of ESPN Bet.
- It is apparent by now that the management's expectations for ESPN Bet has not played out, as losses also widen and market share gains disappoint.
- The US OSB market size is estimated to reach $40B by 2030, implying that the market may very well be big enough to accommodate multiple players, PENN included.
- However, as the management lowers their FY2024 profit guidance, the stock continually charts new lows, and short interest grows, it may be better to downgrade PENN to a Hold for now.
We previously covered PENN Entertainment (NASDAQ: PENN ) in November 2023, discussing why we had concurred with the management's conclusion in which the stock was inherently undervalued compared to historical means and peers, offering interested investors with the opportunistic chance to dollar cost average....
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PENN Entertainment: ESPN Bet Delivers Painful Lessons - More Pain Ahead