If You Invested $1,000 In Penn National Gaming Stock One Year Ago, Here's How Much You'd Have Now

Investors who have owned stocks in the last year have generally experienced some big gains. In fact, the SPDR S&P 500 ETF Trust SPY total return over the last 12 months is 33.8%. But there is no question some big-name stocks performed better than others along the way.

Penn’s Bumpy Ride: One company that has been a disappointing investment in the last year has been casino and online gambling operator Penn National Gaming, Inc PENN.

Penn has been a solid long-term investment, generating a total return of 152.4% over the past three years.

The casino industry was one of the hardest hit industries during the initial stages of the COVID-19 pandemic in 2020. Fortunately for Penn investors, the company made a well-timed investment in Barstool Sports in January 2020. The Barstool deal gave Penn a 36% ownership stake in Barstool for $163 million, and Penn has an option to acquire the remainder of Barstool fully in 2023.

When casinos were shut down during the pandemic, Penn made aggressive moves to stave off financial hardship. In April, Penn sold the real estate of its Tropicana Las Vegas casino to Gaming and Leisure Properties Inc GLPI for $337.5 million in rent credits. Penn still operates the casino.

Penn also began rolling out mobile sports betting app Barstool Sportsbook in September 2020 in Pennsylvania, with influential Barstool founder Dave Portnoy leading the online marketing efforts. The Barstool Sportsbook app has since expanded to Pennsylvania, Michigan, Illinois, Colorado, Virginia, New Jersey, Tennessee, Arizona, Iowa and Indiana.

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At the beginning of 2020, Penn shares were trading at just $25.97. By the beginning of March, the stock was up to $29.70 as news of the coronavirus spreading in China prompted concerns about a U.S. pandemic.

When the market crashed during the U.S. COVID-19 outbreak in March, Penn shares dropped as low as $3.75 during the height of the pandemic fears.

When the market bounced in late March 2020, Penn began to rebound as well. In fact, the stock made it back up to pre-pandemic highs above $30 by June.

Penn hit $50 in August and $80 in December as the Barstool Sportsbook app continued to expand and casinos reopened around the country.

Penn In 2021, Beyond: Penn shares hit new highs of $142 in March 2021 before spending the next eight months drifting steadily lower. MGM Resorts MGM, Draftkings Inc DKNG and Flutter Entmt ADR PDYPY subsidiary FanDuel have taken an early market share lead in the U.S. iGaming market.

In July, Penn took another gamble by acquiring Score Media and Gaming Inc. for $2 billion, but the deal didn’t stop the bleeding in Penn’s stock.

To make matters worse, the controversial Portnoy was accused of sexual misconduct by Business Insider in November on the same day Penn reported a large third-quarter earnings miss. Portnoy has since provided evidence suggesting Business Insider’s allegations against him are false, but Penn shares have continued to drift to new $52-week lows below $55 per share.

Penn investors who bought one year ago and held on have generated a bad return on their investment at this point. In fact, $1,000 in Penn stock bought on Nov. 22, 2020, would be worth about $750 today.

Looking Ahead: Analysts are expecting Penn’s stock to regain its bullish momentum in the next 12 months. The average price target among the 17 analysts covering the stock is $81, suggesting a 52.5% upside from current levels.