Penn National Gaming Stock Investors Pull Back After Q1 Report, Company Sees Momentum Ahead

Penn National Gaming reported first-quarter earnings Thursday morning, sending the stock lower.

The keys for investors could be the discussion on growing momentum at land-based casinos and the continued rollout of Barstool Sportsbook. 

What Happened: Penn National Gaming's PENN first-quarter revenue was down 6% year-over-year. Revenue of $1.27 billion in the first quarter beat Street estimates of $1.14 billion.

The company reported earnings per share of 55 cents, coming in ahead of Street estimates of 29 cents per share.

Penn National Gaming highlighted strong demand at land-based casinos and cost structure improvements. The company posted net income growth of 7% year-over-year in the first quarter and record adjusted EBITDAR margins of 35%.

The company’s online sports betting and online casino segment saw launches in Michigan and Illinois in the quarter. In Illinois, the company said it had better first-time deposit conversions in the first 30 days compared to both Michigan and Pennsylvania.

Penn's Illinois online sports betting handle totaled $67.7 million in the first quarter, with revenue of $6.5 million.

Related Link: Penn National Gaming: Why This Analyst Is Bullish

What’s Next: The company said the length of play levels from customers at land-based casinos climbed in February. In March, the company recorded volumes it had not seen since 2019 for its land-based casinos.

“Today, we’re still seeing spend-per-visit that is much higher than it was pre-Covid, and visitation is at or near 2019 levels in most of our markets,” Penn National Gaming CEO Jay Snowden said in. statement. 

The momentum from the economic reopening of states and casinos could help the company the rest of the fiscal year.

The launch of the company’s Barstool Sportsbook in more states continues to be a big story for the rest of the fiscal year.

“We remain focused on garnering top-three gaming revenue market share for the Barstool Sportsbook and driving best in class profitability,” Snowden said.

See also: How to Buy Penn National Gaming (PENN) Stock

Barstool Sportsbook has over 400,000 customers and a betting handle of $660 million in seven months.

“We plan for the online Barstool Sportsbook to be live in eight states by football season and in at least 10 states before the end of the year.”

PENN Price Action: Penn National Gaming shares were down 2.75% at $88.90 in premarket trading.