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Factors Setting the Tone for Penn National (PENN) Q2 Earnings

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Penn National Gaming, Inc. (PENN - Free Report) is scheduled to report second-quarter 2020 results on Aug 6. In the last-reported quarter, the company’s bottom line missed the Zacks Consensus Estimate by 70%.

Q2 Expectations

The Zacks Consensus Estimate for second-quarter bottom line is pegged at a loss of $2.06, suggesting a sharp decline from earnings of 44 cents in the prior-year quarter. For revenues, the consensus mark stands at $232.7 million, indicating a decline of 82.4% from the year-ago quarter.

Let’s analyze the factors that are likely to make an impact this earnings season.

Penn National Gaming, Inc. Price and EPS Surprise

 

Penn National Gaming, Inc. Price and EPS Surprise

Penn National Gaming, Inc. price-eps-surprise | Penn National Gaming, Inc. Quote

Factors to Note

Penn National’s second-quarter results are likely to reflect the impact of the coronavirus pandemic. Although the company has reopened majority of its properties, dismal traffic due to social-distancing protocols is likely to have dented the top line in the second quarter. Also, increased costs associated with online betting, iGaming and sportsbooks along with sanitary and cleanliness costs are likely to have hurt margins in the to-be-reported quarter.

Notably, the Zacks Consensus estimate for Northeast segment, South segment, West segment, Midwest segment and other segment is currently pinned at a respective $57 million, $39.8 million, $13 million, $29.3 million, $7.4 million, indicating a decline of 90.5%, 85.9%, 92.1%, 89.1% and 21.3% from the year-ago reported figure.

Nonetheless, increased focus on the development of Barstool Sports betting app, sports books build-outs and omni-channel distribution strategy is likely to have aided the company’s performance in the to-be-reported quarter.

What Our Model Says

Our proven model predicts an earnings beat for Penn National this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings.

Earnings ESP: Penn National has an Earnings ESP of +3.59%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Stocks Poised to Beat Earnings Estimates

Here are some other stocks from the Zacks Consumer Discretionary space that investors may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Funko, Inc. (FNKO - Free Report) has a Zacks Rank #3 and an Earnings ESP of +10.96%.

Activision Blizzard, Inc. has a Zacks Rank #3 and an Earnings ESP of +0.31%.

Century Casinos, Inc. (CNTY - Free Report) has a Zacks Rank #3 and an Earnings ESP of +16.42%

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