Analyzing Light & Wonder (NASDAQ:LNW) and PENN Entertainment (NASDAQ:PENN)

PENN Entertainment (NASDAQ:PENN) and Light & Wonder (NASDAQ:LNW) are both mid-cap consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, profitability, analyst recommendations and valuation.

Volatility and Risk

PENN Entertainment has a beta of 1.53, meaning that its stock price is 53% more volatile than the S&P 500. Comparatively, Light & Wonder has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500.

Earnings & Valuation

This table compares PENN Entertainment and Light & Wonder”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PENN Entertainment	$6.82 billion	0.32	-$311.50 million	($6.35)	-2.34
Light & Wonder	$3.22 billion	2.31	$336.00 million	$4.59	19.86

Light & Wonder has lower revenue, but higher earnings than PENN Entertainment. PENN Entertainment is trading at a lower price-to-earnings ratio than Light & Wonder, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

91.7% of PENN Entertainment shares are owned by institutional investors. Comparatively, 88.1% of Light & Wonder shares are owned by institutional investors. 2.7% of PENN Entertainment shares are owned by insiders. Comparatively, 2.2% of Light & Wonder shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares PENN Entertainment and Light & Wonder’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PENN Entertainment	-1.12%	-4.36%	-0.85%
Light & Wonder	10.89%	71.17%	8.73%

Analyst Ratings

This is a summary of recent ratings for PENN Entertainment and Light & Wonder, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PENN Entertainment	2	6	10	0	2.44
Light & Wonder	1	4	5	0	2.40

PENN Entertainment presently has a consensus price target of $22.60, indicating a potential upside of 52.26%. Light & Wonder has a consensus price target of $102.14, indicating a potential upside of 12.08%. Given PENN Entertainment’s stronger consensus rating and higher possible upside, equities analysts clearly believe PENN Entertainment is more favorable than Light & Wonder.

About PENN Entertainment

PENN Entertainment, Inc., together with its subsidiaries, provides integrated entertainment, sports content, and casino gaming experiences. The company operates through five segments: Northeast, South, West, Midwest, and Interactive. It operates online sports betting in various jurisdictions; and iCasino under Hollywood Casino, L'Auberge, ESPN BET, and theScore Bet Sportsbook and Casino brands. The company's portfolio also includes PENN Play, customer loyalty program, which offers a set of rewards and experiences for business channels. In addition, it owns various trademarks and service marks, including Ameristar, Argosy, Boomtown, Hollywood Casino, Hollywood Gaming, L'Auberge, PENN Play, theScore, theScore Bet, theScore esports, and M Resort. The company was formerly known as Penn National Gaming, Inc. and changed its name to PENN Entertainment, Inc. in August 2022. PENN Entertainment, Inc. was founded in 1972 and is based in Wyomissing, Pennsylvania.

About Light & Wonder

Light & Wonder, Inc. is a cross-platform global games company, which engages in the development of content and digital markets. It operates through the following segments: Gaming, SciPlay, and iGaming. The Gaming segment includes the design, manufacture, marketing, and distribution of portfolio of gaming products and services. The SciPlay segment involves the development and publishing of digital games on mobile and web platforms. The iGaming segment focuses on the provision of digital gaming content, distribution platforms, player account management systems, and services. The company was founded on July 2, 1984 and is headquartered in Las Vegas, NV.