PENN Entertainment, Inc.

Where It Passes

Where It Falls Short

• Debt & Leverage0% pass✗ 15▾

  All 12 investors flag PENN's debt & leverage

  LT Debt vs Net Current AssetsLT Debt $2.7B vs NCA $-60.0M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 1.45, IC: 0.8x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity1.45

  ✗Lynch< 0.33

  Cash - Long-term Debt$-1.7B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change17.90% -> 19.97%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities0.96

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity1.45

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels1.45

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=0.8x, D/EBITDA=3.4x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity1.45

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-1.4531; #3563/4210 (top 84.6%)

  ✗AsnessTop 30% of eligible cross-section
• Valuation0% pass✓ 5✗ 23▾

  No clean pass — all 13 investors flag at least one valuation criterion

  Price / Book Value per Share1.4x

  ✗Dreman< 1.2x✓Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio1.4x

  ✓Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value8.3%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=8.3%, ROC=14.3%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)5.0x

  ✓Dreman< 8x

  Valuation ReasonablenessOE Yield=-15.7%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF Yield

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=1.4x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share

  ✗Ackman<= 25

  Price vs. Trailing Low136% of trailing low ($12.84)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization-0.39%; #3295/6340 (top 52.0%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.8109; #1893/6449 (top 29.4%)

  ✓AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per ShareN/A (non-positive TBVPS)

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change-25.7%

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+3.0998; #786/5247 (top 15.0%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+14.75%; #1606/6202 (top 25.9%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Efficiency0% pass✓ 1✗ 10▾

  No clean pass — all 8 investors flag at least one efficiency criterion

  Current Ratio0.96

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)2.0%

  ✗Buffett> 10%

  ROIC - WACC-8.0%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)14.3%

  ✗Greenblatt> 25%

  Current Ratio Change YoY0.82 -> 0.79

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.43x -> 0.49x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities0.96

  ✗Dreman> 1.5

  Return on Invested Capital5.7%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=-9.1%; FY2024: ROIC=1.0%; FY2025: ROIC=-11.3%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)2/5 years above 12% (latest -11.3%)

  ✗SleepROIC > 12% in a majority of years
• Verdicts7% pass✓ 1✗ 13▾

  Split decision: 12 FAIL · 3 NEUTRAL · 1 PASS

  Overall verdict

  ✗GrahamFAIL (2/9)✗BuffettFAIL (1/9)✗LynchFAIL (1/7)✗GreenblattRank #920✓PiotroskiPASS (F-Score 4)✗DremanFAIL (2/11)✗MungerFAIL (1/4)✗PabraiFAIL (1/3)✗AkreFAIL (0/6)✗MarksFAIL (3/5)✗AckmanFAIL (2/9)✗TempletonFAIL (3/8)•SleepNEUTRAL (4/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (1/6)✗SchlossFAIL (0/7)•OshaughnessyNEUTRAL (Not ranked)
• Profitability13% pass✓ 6✗ 29▾

  14 of 16 flag PENN's profitability — Graham, Buffett, Lynch +11 more

  Positive EPS (10 years)20/29 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)20/29 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-11.1%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-9.7% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$526.2M

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE-0.5%

  ✗Lynch> 15%

  EBIT / Enterprise Value8.3%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=8.3%, ROC=14.3%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-5.91%

  ✗PiotroskiROA > 0

  ROA Change YoY-2.04% -> -5.91% (delta: -3.87%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=3.56%, ROA=-5.91%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue-0.4%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-0.5%

  ✗Dreman> 12%

  Margin of SafetyP/B=1.4x

  ✓PabraiP/B < 1.5 or P/E < 15

  Return on Equity-24.1% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency20/29 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue4.6%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-0.5%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-10.8% (2023) -> -9.7% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin -10.8% -> -9.7%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-0.39%; #3295/6340 (top 52.0%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity-0.48%; #2951/5226 (top 56.5%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0302; #1924/5884 (top 32.7%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR-23.9% over 5 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years6/10 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Growth25% pass✓ 4✗ 9▾

  6 of 8 flag PENN's growth — Graham, Lynch, Dreman +3 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthN/A (no inventory)

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency20/29 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth3.4%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency2/5 years with positive EPS growth

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin -10.8% -> -9.7%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR14.2%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR-23.9% over 5 years

  ✗Neff7%-20% annualized
• Cash Flow50% pass✓ 6✗ 6▾

  5 of 10 pass — Lynch, Pabrai, Ackman +2 more object

  Free Cash Flow Proxy$526.2M

  ✓BuffettPositive and growing

  FCF Positive and Growing$614.8M

  ✗LynchPositive and growing

  Operating Cash Flow$508.2M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=3.56%, ROA=-5.91%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)5.0x

  ✓Dreman< 8x

  P/E or FCF Yield

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive22/26 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap

  ✗Ackman>= 4%

  Price / FCF per Share

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency29/29 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section