DCF Tool

PENN

Penn National Gaming, Inc. – Casinos (except Casino Hotels)
With the nation's largest and most diversified regional gaming footprint, including 41 properties across 19 states, Penn National continues to evolve into a highly innovative omni-channel provider of retail and online gaming, live racing and sports betting entertainment. The Company's properties feature approximately 50,000 gaming machines, 1,300 table games and 8,800 hotel rooms, and operate under various well-known brands, including Hollywood, Ameristar, and L'Auberge. Its wholly-owned interactive division, Penn Interactive, operates retail sports betting across the Company's portfolio, as well online social casino, bingo, and iCasino products. In February 2020, Penn National entered into a strategic partnership with Barstool Sports, whereby Barstool is exclusively promoting the Company's land-based and online casinos and sports betting products, including the Barstool Sportsbook mobile app, to its national audience. The Company's omni-channel approach is bolstered by the mychoice loyalty program, which rewards and recognizes its over 20 million members for their loyalty to both retail and online gaming and sports betting products with the most dynamic set of offers, experiences, and service levels in the industry.
Analysis Results
Intrinsic Value $90.64
Latest Price $31.79
Relative Value 65% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 9.5%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.8%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 9.5%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 0.858 0.788
2023 0.94 0.794
2024 1.03 0.799
2025 1.13 0.804
2026 1.23 0.809
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 18.5 billion. This corresponds to a present value of 11.1 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 3.99 billion. Adding in the terminal value gives a total present value of 15.1 billion.

There are presently 167.0 million outstanding shares, so the intrinsic value per share is 90.64.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 2,223,600,000
Current Cash 1,863,900,000
Current Liabilities 1,133,200,000
Current Debt 148,600,000
Non-Cash Working Capital (NCWC) -624,900,000
Change in NCWC -120,400,000
EBIT 1,098,300,000
Tax Provision 118,600,000
Depreciation and Amortization 344,500,000
Capital Expenditure -244,100,000
Unlevered Free Cash Flow 836,678,074
Current Assets 2,085,000,000
Current Cash 1,853,800,000
Current Liabilities 860,000,000
Current Debt 124,300,000
Non-Cash Working Capital (NCWC) -504,500,000
Change in NCWC 85,800,000
EBIT 227,000,000
Tax Provision -165,100,000
Depreciation and Amortization 366,700,000
Capital Expenditure -137,000,000
Unlevered Free Cash Flow 542,500,000
Current Assets 642,800,000
Current Cash 437,400,000
Current Liabilities 905,600,000
Current Debt 109,900,000
Non-Cash Working Capital (NCWC) -590,300,000
Change in NCWC -179,841,000
EBIT 773,400,000
Tax Provision 43,000,000
Depreciation and Amortization 414,200,000
Capital Expenditure -165,500,000
Unlevered Free Cash Flow 456,008,128
Current Assets 677,658,000
Current Cash 479,598,000
Current Liabilities 738,436,000
Current Debt 129,917,000
Non-Cash Working Capital (NCWC) -410,459,000
Change in NCWC -95,389,000
EBIT 674,339,000
Tax Provision -3,593,000
Depreciation and Amortization 268,990,000
Capital Expenditure -89,685,000
Unlevered Free Cash Flow 758,255,000
Current Assets 401,032,000
Current Cash 277,953,000
Current Liabilities 530,009,000
Current Debt 91,860,000
Non-Cash Working Capital (NCWC) -315,070,000
Change in NCWC -90,699,000
EBIT 571,906,000
Tax Provision -498,507,000
Depreciation and Amortization 267,062,000
Capital Expenditure -99,261,000
Unlevered Free Cash Flow 649,008,000
Current Assets 399,265,000
Current Cash 229,510,000
Current Liabilities 536,316,000
Current Debt 142,190,000
Non-Cash Working Capital (NCWC) -224,371,000
Change in NCWC 55,280,000
EBIT 556,627,000
Tax Provision 11,307,000
Depreciation and Amortization 271,214,000
Capital Expenditure -97,245,000
Unlevered Free Cash Flow 733,696,112
Current Assets 372,476,000
Current Cash 237,009,000
Current Liabilities 557,774,000
Current Debt 142,656,000
Non-Cash Working Capital (NCWC) -279,651,000
Change in NCWC -36,736,000
EBIT 522,376,000
Tax Provision 55,924,000
Depreciation and Amortization 259,461,000
Capital Expenditure -199,240,000
Unlevered Free Cash Flow 29,815,152
Current Assets 372,608,000
Current Cash 208,673,000
Current Liabilities 484,587,000
Current Debt 77,737,000
Non-Cash Working Capital (NCWC) -242,915,000
Change in NCWC -124,910,000
EBIT 419,347,000
Tax Provision 30,519,000
Depreciation and Amortization 266,742,000
Capital Expenditure -228,145,000
Unlevered Free Cash Flow 333,034,000
Current Assets 508,861,000
Current Cash 292,995,000
Current Liabilities 361,469,000
Current Debt 27,598,000
Non-Cash Working Capital (NCWC) -118,005,000
Change in NCWC 73,444,000
EBIT 370,102,000
Tax Provision -121,538,000
Depreciation and Amortization 298,326,000
Capital Expenditure -199,913,000
Unlevered Free Cash Flow 541,959,000
Current Assets 487,140,000
Current Cash 260,467,000
Current Liabilities 499,619,000
Current Debt 81,497,000
Non-Cash Working Capital (NCWC) -191,449,000
Change in NCWC 12,983,000
EBIT 439,164,000
Tax Provision 152,555,000
Depreciation and Amortization 245,348,000
Capital Expenditure -472,985,000
Unlevered Free Cash Flow 40,718,819

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