What Happened:

Shares of casino, sports betting and entertainment operator PENN Entertainment (NASDAQ:PENN) fell 13.6% in the morning session after the company reported fourth-quarter results, with revenue and operating margin falling short of Wall Street's estimates. Notably, the topline performance was weak, with revenue down -12% year on year. The declining revenue impacted profitability ratios, with gross and operating income also falling year on year. Overall, this was a mediocre quarter for PENN Entertainment.

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What is the market telling us:

PENN Entertainment's shares are quite volatile and over the last year have had 22 moves greater than 5%. But moves this big are very rare even for PENN Entertainment and that is indicating to us that this news had a significant impact on the market's perception of the business.

PENN Entertainment is down 26.7% since the beginning of the year, and at $19.02 per share it is trading 41.8% below its 52-week high of $32.68 from February 2023. Investors who bought $1,000 worth of PENN Entertainment's shares 5 years ago would now be looking at an investment worth $778.78.

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