It has been about a month since the last earnings report for Penn National Gaming (PENN Quick QuotePENN - Free Report) . Shares have added about 23.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Penn National Gaming due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Penn National Reports Narrower-Than Expected Q2 Loss

Penn National reported narrower-than-expected loss for second-quarter 2020. Revenues also beat the Zacks Consensus Estimate, buoyed by pent-up demand in May and June.

Jay Snowden, its president and CEO, said “In addition, our geographic diversification across 19 states -- with no more than 15% of our revenues being derived from any single state -- has proven to be a significant benefit as states have reopened casinos on a staggered basis. Although visitation has yet to return to pre-COVID levels, in large part due to state mandated capacity restrictions and limited amenities, spend per visit has been notably strong, resulting in better than expected revenues.”

The company remains optimistic about third-quarter results, backed by impressive revenue and EBITDAR trends in July and early August despite maintaining safety protocols, including capacity restrictions and social distancing mandates. It expects a meaningful portion of the margin improvements to recur as it continues to make fundamental changes to enhance offerings and efficiencies across the organization.

Earnings & Revenues Discussion

Adjusted loss came in at $1.69 per share, narrower than the Zacks Consensus Estimate of a loss of $2.06. In the year-ago period, the company reported earnings of 44 cents per share.

Net revenues totaled $305.5 million, which beat the consensus mark of $233 million by 31.3% but declined 76.9% from the year-ago quarter.

The Northeast segment reported revenues of $102.7 million, down 82.9% year over year. The South, Midwest, and West segments’ revenues came in at $121.5 million, $36 million and $17.7 million, down 56.9%, 86.6% and 89.2% year over year, respectively. Meanwhile, the Other segment reported revenues of $27.6 million, up 193.6% year over year.

EBITDAR Declines

Adjusted EBITDAR decreased 94% from the year-ago quarter to $24.5 million. Moreover, adjusted EBITDAR margin contracted 8% from 30.7% a year ago.

Other Financial Information

At second quarter-end, cash and cash equivalents increased to $1,244.3 million from $437.4 million as of Dec 31, 2019. Bank debt as of Jun 30, 2020 was $2,403.1 million, up from $1,896.5 million on Dec 31, 2019.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 86.7% due to these changes.

VGM Scores

At this time, Penn National Gaming has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Penn National Gaming has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.