Shares of PENN Entertainment, Inc. (NASDAQ: PENN) have moved down 28.5% year to date against the Zacks Gaming industry's 7.3% growth and the S&P 500's rise of 19.6%.
The company also underperformed other industry players like DoubleDown Interactive Co., Ltd. (NASDAQ: DDI), PlayAGS, Inc. (NYSE: AGS) and Red Rock Resorts, Inc. (NASDAQ: RRR), which surged 98.1%, 34.3% and 9.3%, respectively, in the said period. The substantial decline in PENN's shares raises questions about whether it is the right time to buy at a lower price or if investors should hold off until the stock shows signs of stabilization.
Image Source: Zacks Investment Research
PENN Stock Trades Below 50- & 200-Day Moving Averages
Image Source: Zacks Investment Research
PENN is currently trading below the 50- and 200-day moving averages, indicating weaker performance compared to recent trends. Although the company is making notable progress through various positive initiatives — such as enhanced top-of-funnel growth, effective risk management and refined promotional strategies — the stock's position below these key moving averages raises concerns.
What's Hurting PENN's Performance?
In spite of reporting decent second-quarter 2024 results — with earnings and revenues exceeding the Zacks Consensus Estimate by 33.3% and 1%, respectively — the top and the bottom line declined year over year. The downtick was primarily due to disappointing performance in its South and Interactive segments.
The company is grappling with a dismal performance in its South segment due to increased competition and severe weather events affecting operations. PENN's Interactive segment is facing challenges with reduced food, beverage, hotel and other revenues despite a slight increase in gaming revenues. Increased marketing expenditures in the ...
