Head to Head Contrast: Skillz (NYSE:SKLZ) & PENN Entertainment (NASDAQ:PENN)

PENN Entertainment (NASDAQ:PENN) and Skillz (NYSE:SKLZ) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for PENN Entertainment and Skillz, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PENN Entertainment	1	7	8	0	2.44
Skillz	1	0	2	0	2.33

PENN Entertainment presently has a consensus target price of $19.80, suggesting a potential upside of 34.06%. Skillz has a consensus target price of $15.00, suggesting a potential upside of 307.61%. Given Skillz’s higher possible upside, analysts plainly believe Skillz is more favorable than PENN Entertainment.

Institutional & Insider Ownership

91.7% of PENN Entertainment shares are held by institutional investors. Comparatively, 19.4% of Skillz shares are held by institutional investors. 2.7% of PENN Entertainment shares are held by company insiders. Comparatively, 38.3% of Skillz shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PENN Entertainment	-12.11%	-1.94%	-0.32%
Skillz	-55.23%	-50.40%	-20.94%

Valuation & Earnings

This table compares PENN Entertainment and Skillz”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PENN Entertainment	$6.96 billion	0.28	-$843.10 million	($6.02)	-2.45
Skillz	$104.50 million	0.55	-$70.41 million	($3.71)	-0.99

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

Volatility and Risk

PENN Entertainment has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, Skillz has a beta of 3.08, suggesting that its share price is 208% more volatile than the S&P 500.

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 Skillz

Skillz Inc. operates a mobile game platform in the United States and internationally. The company primarily develops and supports a proprietary online-hosted technology platform that enables independent game developers to host tournaments and provide competitive gaming activity to end-users. The company distributes games through direct app download from its website, as well as through third-party platforms. Skillz Inc. was founded in 2012 and is based in San Francisco, California.