As of May 24, 2025, Penn National Gaming Inc has a Discounted Cash Flow (DCF) derived fair value of $42.89 per share. With the current market price at $15.08, this represents a potential upside of 184.4%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $25.36 |
| DCF Fair Value (10-year) | $42.89 |
| Potential Upside (5-year) | 68.2% |
| Potential Upside (10-year) | 184.4% |
| Discount Rate (WACC) | 6.6% - 15.5% |
Revenue is projected to grow from $6578 million in 12-2024 to $9515 million by 12-2034, representing a compound annual growth rate of approximately 3.8%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 6578 | 3% |
| 12-2025 | 6847 | 4% |
| 12-2026 | 7027 | 3% |
| 12-2027 | 7410 | 5% |
| 12-2028 | 7642 | 3% |
| 12-2029 | 8192 | 7% |
| 12-2030 | 8592 | 5% |
| 12-2031 | 8780 | 2% |
| 12-2032 | 9105 | 4% |
| 12-2033 | 9328 | 2% |
| 12-2034 | 9515 | 2% |
Net profit margin is expected to improve from -5% in 12-2024 to 10% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | (313) | -5% |
| 12-2025 | (101) | -1% |
| 12-2026 | 76 | 1% |
| 12-2027 | 261 | 4% |
| 12-2028 | 445 | 6% |
| 12-2029 | 657 | 8% |
| 12-2030 | 724 | 8% |
| 12-2031 | 776 | 9% |
| 12-2032 | 842 | 9% |
| 12-2033 | 901 | 10% |
| 12-2034 | 957 | 10% |
with a 5-year average of $331 million. Projected CapEx is expected to maintain at approximately 6% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 379 |
| 12-2026 | 403 |
| 12-2027 | 431 |
| 12-2028 | 430 |
| 12-2029 | 412 |
| 12-2030 | 432 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 16 |
| Days Inventory | 0 |
| Days Payables | 4 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 517 | (19) | 285 | 29 | 221 |
| 2026 | 946 | 19 | 390 | 19 | 518 |
| 2027 | 1228 | 64 | 412 | (0) | 752 |
| 2028 | 1471 | 110 | 425 | 19 | 918 |
| 2029 | 1753 | 162 | 455 | 23 | 1112 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 25.36 | 68.2% |
| 10-Year DCF (Growth) | 42.89 | 184.4% |
| 5-Year DCF (EBITDA) | 28.63 | 89.8% |
| 10-Year DCF (EBITDA) | 43.26 | 186.9% |
Is Penn National Gaming Inc (PENN) a buy or a sell? Penn National Gaming Inc is definitely a buy. Based on our DCF analysis, Penn National Gaming Inc (PENN) appears to be significantly undervalued with upside potential of 184.4%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $15.08.