That volatility includes a steep decline from all-time highs reached in mid-March: PENN now is off 46%. It's also exceedingly easy to understand why PENN stock has seen such volatility over the 15-plus months since the Barstool deal was announced.
Tack on reasonably significant financial leverage (when accounting for long-term leases with Penn's former spin-off, Gaming and Leisure Partners ( GLPI )) and it's exceedingly difficult to pin down a price target with precision. We don't know exactly what the market's long-term margin potential looks like. Barstool's reach isn't as wide as that of pure-play rivals. Most major states still haven't moved forward, particularly in iGaming. Penn's aggressive move into online sports betting and iGaming adds yet another layer. First-quarter earnings look surprisingly solid, but it's fair to wonder if Penn is benefiting from pent-up demand, at least on a per-visitor basis. But the 'return to normalcy' creates its own problems.
Obviously, the lingering effects of the novel coronavirus pandemic raise a near-term issue after last week's Q1 earnings report, Penn refrained from reinstating guidance.
There is a staggering amount of uncertainty surrounding Penn National Gaming, Inc. Photo by Ethan Miller/Getty Images News via Getty Images
