Brightstar Lottery (BRSL) AI Stock Analysis

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Brightstar Lottery

(NYSE:BRSL)

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Neutral 66 (OpenAI - 5.2)

Rating:66Neutral

Price Target:

$15.50

▲(8.54% Upside)

Action:ReiteratedDate:11/07/25

Brightstar Lottery's overall stock score is driven by strong earnings call results and a high dividend yield, indicating potential undervaluation. However, financial performance challenges, including declining profitability and high leverage, weigh on the score. Technical indicators suggest a neutral trend, adding moderate influence.

Positive Factors

High gross profit margin

A near-44% gross margin indicates durable unit economics typical of lottery operations. Strong gross margins provide a buffer against prize and marketing variability, enable profitable scaling of digital iLottery channels, and support long-term EBITDA resilience despite revenue cycles.

Long-term contracts win

Securing multi-year government contracts like the eight-year Wisconsin Omnia deal and long Italy concessions creates predictable, recurring revenue streams. Coupled with sustained iLottery growth, these contracts reduce revenue volatility and lock in service-based cash flows over multiple years.

Stronger liquidity and capital returns

Improved liquidity and active capital returns (dividends and buybacks) signal disciplined capital allocation and greater flexibility. Elevated cash and reduced net debt enhance capacity to invest in digital initiatives, opportunistically deleverage, and maintain shareholder distributions over the medium term.

Negative Factors

High leverage

A TTM debt-to-equity of 4.33 and low equity ratio show material leverage. High structural leverage raises interest expense sensitivity, limits strategic flexibility for M&A or capex, and increases refinancing risk if cash flows deteriorate, constraining long-term investment options.

Weak free cash flow conversion

An -88% FCF growth and OCF covering only 27% of net income indicate poor cash conversion. Persistent weak FCF undermines capacity to service debt, sustain dividends, fund digital expansion, or absorb regulatory/licensing costs without external financing, increasing structural risk.

License fees & revenue amortization pressure

New concession accounting and up-front license installments increase revenue amortization and reduce near-term reported top-line and cash flow. These structural accounting and fee effects will depress reported revenue and EBITDA comparability and constrain margin improvement for multiple reporting periods.

Brightstar Lottery (BRSL) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.57B

Dividend Yield24.38%

Average Volume (3M)1.51M

Price to Earnings (P/E)12.2

Beta (1Y)0.85

Revenue Growth-34.93%

EPS Growth83.72%

CountryUS

Employees11,000

SectorConsumer Cyclical

Sector Strength84

IndustryGambling, Resorts & Casinos

Share Statistics

EPS (TTM)0.36

Shares Outstanding189,426,970

10 Day Avg. Volume1,415,806

30 Day Avg. Volume1,505,509

Financial Highlights & Ratios

PEG Ratio0.07

Price to Book (P/B)2.16

Price to Sales (P/S)1.42

P/FCF Ratio4.05

Enterprise Value/Market Cap2.03

Enterprise Value/Revenue2.09

Enterprise Value/Gross Profit4.58

Enterprise Value/Ebitda5.58

Forecast

1Y Price Target

$18.33

Price Target Upside28.36% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

Brightstar Lottery Business Overview & Revenue Model

Company DescriptionA pure‑play global lottery operator - providing technology and services for regulated lotteries. Previously included gaming and iGaming operations, which were divested.

How the Company Makes MoneyBrightstar Lottery generates revenue primarily through ticket sales from its lottery games, including both physical tickets and online purchases. The company earns a percentage of the total sales as profit, which is further boosted by high player participation in its various gaming offerings. Additionally, BRSL partners with state and national lottery organizations to manage and operate lottery programs, receiving a commission for these services. The company also explores revenue opportunities through advertising partnerships and promotional campaigns, utilizing its extensive player base to attract sponsors. By continuously innovating its product offerings and expanding its market reach, Brightstar Lottery leverages multiple revenue streams to enhance its financial performance.

Brightstar Lottery Earnings Call Summary

Earnings Call Date:Feb 24, 2026

(Q4-2025)

Next Earnings Date:May 12, 2026

Earnings Call Sentiment Neutral

Balanced: the call conveyed solid underlying operating performance (Q4 revenue up 3%, Q4 adjusted EBITDA up 5%), meaningful deleveraging, strong shareholder returns (>$1B in 2025), and strategic wins (nine-year Italy Lotto license, São Paulo greenfield, iLottery momentum). However, near-term financials are materially impacted by the sizable Italy upfront license payments and associated amortization, a peak capex cycle, the UK contract transition, and a modest full-year EBITDA decline versus prior year. Adjusted cash generation looks healthy after excluding one-time license outflows, but reported cash and leverage will be stressed through the license payment in 2026 before improving. Overall, positives around growth initiatives and balance sheet repair are roughly balanced by near-term cash/earnings pressure from the license and investment cycle.

Q4-2025 Updates

Positive Updates

Quarterly Revenue Growth

Q4 revenue of $668,000,000, up 3% year-over-year (from $651,000,000), driven by elevated U.S. multistate jackpot activity and strong iLottery performance.

Solid Adjusted EBITDA Performance (Quarter)

Adjusted EBITDA for Q4 was $304,000,000, a 5% increase versus $290,000,000 in the prior year quarter; management also reports full-year EBITDA around $1.10–1.12 billion.

Strong Adjusted Cash Generation (Before License Fees)

Company generated nearly $750,000,000 in cash from operations before funding the first two Italy Lotto license installments (reported cash from operations was negative $193,000,000 but +$733,000,000 on an adjusted basis).

Material Shareholder Returns

Returned over $1,000,000,000 to shareholders in 2025: $770,000,000 in cash dividends (including a $3 per share special dividend and $0.82 in regular dividends) and $271,000,000 in share repurchases; announced a new quarterly dividend of $0.23 (a 15% increase vs. historical run rate).

Balance Sheet and Leverage Improvement

Net debt improved to $2,700,000,000 at year-end 2025 from $4,800,000,000 at end-2024 (a reduction of ~$2.1B, ~44%); net debt leverage reduced to 2.4x from 4.1x, and liquidity exceeds $3,000,000,000.

Strategic Contract Win — Italy Lotto License

Secured the Italy Lotto license for nine years, enabling a planned major digital expansion (iLottery, iCasino, sports betting) across one of the world’s largest retail networks (~50,000 points of sale).

iLottery and Digital Progress

Italy iLottery wagers up over 20% in FY25; My Lotteries app has gained ~3 percentage points of market share since launch; company hired an experienced digital gaming executive to lead B2C efforts.

OPTIMA Cost Program and Efficiency Targets

OPTIMA program delivered cost reductions and management is tracking toward ~ $50,000,000 of targeted savings by 2026 (savings split between service gross margin and operating expenses).

Large New Growth Opportunity — Sao Paulo, Brazil

Won a rare large-market greenfield lottery launch in São Paulo (joint venture with Scientific Games) — expected to be long-term meaningful revenue/cash flow once ramped, though it will require upfront investment and a multi-year buildout.

Negative Updates

Impact of UK Technology Contract Transition

UK technology contract transition created headwinds (cited ~$18,000,000 impact), weighing on revenue and profit flow-through in the year.

Full-Year Adjusted EBITDA Decline

Full-year adjusted EBITDA was $1,120,000,000 versus $1,170,000,000 in the prior year — a decline of ~4.3% year-over-year, as growth in wager-based revenue was offset by prior-year LMA incentives, the UK transition, and timing of product deliveries.

Significant Upfront Italy License Cash Outflows and Amortization

Italy Lotto renewal requires a final installment of €1,430,000,000 (~$1.68B) to be paid in 2026; Brightstar’s share is €880,000,000 (~$1.0B). The new license adds ~€41,000,000 per quarter of amortization (treated as contra revenue) and management expects ~ $175,000,000 incremental amortization in 2026, pressuring reported revenue and cash metrics.

Reported Negative Operating Cash Flow and Free Cash Flow (Due to License Payments)

Reported cash from operations was -$193,000,000 and reported free cash flow was -$509,000,000 in 2025; both are positive on an adjusted basis (cash from ops +$733,000,000; free cash flow +$417,000,000) when excluding license fee outflows.

High Near-Term CapEx and Investment Load

2026 CapEx guidance of $450,000,000–$475,000,000 (three-quarters contractual) reflects a peak investment cycle through 2025–2028; this heavy capex cadence will constrain near-term free cash flow until the cycle moderates to ~$200M–$225M annually.

Leverage Expected to Temporarily Rise

Net debt leverage is expected to peak at ~3.5x after the final Italy license payment in Q2 2026 before declining thereafter, adding short-term balance-sheet pressure.

Uncertainty Around Jackpot Dynamics (Mega Millions)

Recent Mega Millions rule changes produced slower-than-expected jackpot builds (game hit jackpot four times, more than statistically expected), creating uncertainty about future jackpot-driven revenue volatility.

Timing/One-off Headwinds and Prior-Year Comparisons

Prior-year items (e.g., $51,000,000 higher LMA incentive revenue in the prior year) and timing of contract transitions and product deliveries masked some organic growth and complicated YoY comparisons.

Company Guidance

Management guided 2026 revenue of $2.50–2.55B (including ~ $175M of Italy Lotto contra‑revenue amortization) and adjusted EBITDA of $1.16–1.19B, assuming €/$ = 1.15; reported cash from operations of -$900M (or +$750M excluding the final €1.43B/~$1.68B Lotto license installment, of which Brightstar’s 61.5% share is ≈ €880M/~$1.0B); CapEx of $450–475M (≈75% contractual); and OPTIMA cost savings tracking to ~ $50M by 2026. Net debt was $2.7B (2.4x leverage) at 2025‑end, is expected to peak ~3.5x after the final payment then move toward a mid‑cycle ≤3x, with liquidity > $3B. Shareholder returns continue (quarterly dividend raised to $0.23; ≈ $200M remaining on the $500M buyback authorization). 2028 targets: ~ $2.75B revenue and ~ $1.3B adj. EBITDA, with an expected ~ $800M annual cash from operations in 2027–28 and > $400M annual free cash flow thereafter (mid‑teens FCF yield at current price).

Brightstar Lottery Financial Statement Overview

Summary

Brightstar Lottery's financial performance is challenged by declining profitability and high leverage. The gross profit margin is solid, but the net profit margin and revenue growth have decreased, indicating operational inefficiencies. High debt levels pose financial risks, and cash flow generation has weakened significantly.

Income Statement

Positive

Brightstar Lottery's income statement shows moderate performance. The TTM Gross Profit Margin is 43.98%, indicating a solid ability to generate profit from revenue. However, the Net Profit Margin has decreased to 7.92% from 13.85% in the previous year, reflecting reduced profitability. Revenue growth is minimal at 1.75% TTM, suggesting stagnation. The EBIT and EBITDA margins have also declined, indicating potential operational inefficiencies.

Balance Sheet

Neutral

The balance sheet reveals a high Debt-to-Equity Ratio of 4.33 TTM, indicating significant leverage and potential financial risk. Return on Equity has decreased to 12.30% TTM from 21.07% in the previous year, reflecting reduced efficiency in generating returns on equity. The Equity Ratio stands at 9.38%, suggesting limited equity financing relative to total assets.

Cash Flow

Neutral

Cash flow analysis shows challenges with a significant decline in Free Cash Flow Growth at -88.10% TTM. The Operating Cash Flow to Net Income Ratio is 0.27, indicating moderate cash generation relative to net income. The Free Cash Flow to Net Income Ratio is 0.77, suggesting some ability to convert net income into free cash flow, albeit reduced from previous levels.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.49B	2.51B	2.53B	2.60B	4.09B	3.12B
Gross Profit	1.14B	1.17B	1.21B	1.20B	1.96B	1.14B
EBITDA	933.00M	1.14B	1.12B	1.42B	1.41B	136.36M
Net Income	304.00M	348.00M	156.00M	275.00M	482.00M	-897.89M
Balance Sheet
Total Assets	9.29B	10.28B	10.46B	10.43B	11.32B	12.99B
Cash, Cash Equivalents and Short-Term Investments	1.70B	584.00M	508.00M	590.00M	591.00M	1.11B
Total Debt	4.31B	5.47B	5.78B	6.03B	6.87B	8.60B
Total Liabilities	7.93B	8.22B	8.51B	8.45B	9.35B	11.43B
Stockholders Equity	871.00M	1.65B	1.44B	1.43B	1.28B	776.74M
Cash Flow
Free Cash Flow	103.05M	881.00M	893.00M	737.00M	740.00M	610.94M
Operating Cash Flow	398.05M	1.03B	1.04B	899.00M	978.00M	865.63M
Investing Cash Flow	3.84B	-357.00M	-467.00M	168.00M	636.00M	-292.77M
Financing Cash Flow	-3.17B	-586.00M	-564.00M	-1.06B	-1.90B	-413.66M

Brightstar Lottery Technical Analysis

Technical Analysis Sentiment

Negative

Last Price14.28

Price Trends

50DMA

14.73

Negative

100DMA

15.52

Negative

200DMA

14.91

Negative

Market Momentum

MACD

-0.37

Positive

RSI

28.64

Positive

STOCH

18.32

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BRSL, the sentiment is Negative. The current price of 14.28 is above the 20-day moving average (MA) of 13.96, below the 50-day MA of 14.73, and below the 200-day MA of 14.91, indicating a bearish trend. The MACD of -0.37 indicates Positive momentum. The RSI at 28.64 is Positive, neither overbought nor oversold. The STOCH value of 18.32 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BRSL.

Brightstar Lottery Risk Analysis

Brightstar Lottery disclosed 41 risk factors in its most recent earnings report. Brightstar Lottery reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Brightstar Lottery Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCRI	78 Outperform	$1.73B	17.44	19.40%	1.22%	4.61%	22.90%
RSI	73 Outperform	$4.14B	65.98	29.49%	―	23.15%	―
BRSL	66 Neutral	$2.57B	12.17	1.61%	24.38%	-34.93%	83.72%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SBET	48 Neutral	$1.30B	-0.84	-0.07%	―	―	―
PENN	47 Neutral	$1.75B	-2.10	-35.97%	―	8.24%	-77.54%
BALY	43 Neutral	$704.99M	-1.80	-114.88%	―	0.36%	47.55%

* Consumer Cyclical Sector Average

Performance Comparison

BRSL

Brightstar Lottery

13.05

-1.23

-8.63%

SBET

SharpLink Gaming

6.49

1.77

37.53%

MCRI

Monarch Casino & Resort

94.43

4.98

5.57%

PENN

PENN Entertainment

12.17

-8.20

-40.26%

RSI

Rush Street Interactive

18.34

5.45

42.28%

BALY

Bally's Corporation

14.06

-1.34

-8.70%

Brightstar Lottery Corporate Events

Brightstar Lottery Buys Back $22.6 Million of Shares and Shifts London Headquarters

Jan 15, 2026

In a series of transactions completed between December 19, 2025 and January 9, 2026, Brightstar Lottery PLC repurchased a total of 1,442,700 ordinary shares under its previously announced $500 million buyback programme, paying an aggregate $22.6 million at prices ranging from $14.98 to $16.15 per share; the shares are being held in treasury, signalling continued capital management efforts that may support earnings per share and shareholder value. Separately, the company said its principal executive office was relocated within the City of London from 10 Finsbury Square to new premises at 2 and 3 Eldon Street, effective January 12, 2026, a move that reflects an administrative shift but does not alter its regulatory reporting status as a foreign private issuer in the United States.

The most recent analyst rating on (BRSL) stock is a Hold with a $16.00 price target. To see the full list of analyst forecasts on Brightstar Lottery stock, see the BRSL Stock Forecast page.

Brightstar Lottery Completes $500 Million Share Repurchase Program

Dec 15, 2025

Brightstar Lottery PLC announced the completion of its $500 million share repurchase program, including the final delivery of shares under its $250 million accelerated share repurchase plan. On December 3 and December 12, 2025, the company repurchased a total of 15,234,554 ordinary shares, which are held in treasury, reflecting a strategic move to enhance shareholder value.