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PENN missed the Street but hit our EBITDA estimate on the nose. Wish we could same about Q1 and 2010 guidance.

We don't have a lot to add to the earnings release.  The takeaway is clear:  2010 is not off to a good start in the regional markets and the recovery duration looks farther down the road.  PENN provided 2010 guidance well below us and the Street consensus, particularly for Q1.  EBITDA and EPS guidance for Q1 was 17% and 39% below the Street, respectively.  Full year 2010 guidance was better, falling "only" 11% and 26%, respectively, under the Street.  However, visibility on gaming revenues is always limited so back end loaded guidance never gives us much comfort. 

At least three legs of PENN long thesis remain:  solid management, a deep long-term development pipeline, and a balance sheet to fund it.  Unfortunately, the significantly lower estimates probably mitigate the "cheap stock" fourth leg of the thesis.