Light & Wonder (LNW) AI Stock Analysis

• Market Cap: $7.08B
• Dividend Yield: N/A
• Average Volume (3M): 885.73K
• Price to Earnings (P/E): 21.2
• Beta (1Y): 1.35
• Revenue Growth: 9.82%
• EPS Growth: 109.44%
• Country: US
• Employees: 6,800
• Sector: Consumer Cyclical
• Sector Strength: 55
• Industry: Gambling, Resorts & Casinos
• EPS (TTM): 3.69
• Shares Outstanding: 84,466,320
• 10 Day Avg. Volume: 1,289,533
• 30 Day Avg. Volume: 885,733
• PEG Ratio: 0.19
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.75
• Price to Cash Flow (P/CF): 10.80
• P/FCF Ratio: 8.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $115.69
• Price Target Upside: 48.15% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

Light & Wonder shows strong financial performance with significant revenue growth and improved profitability. The earnings call highlights strategic initiatives and a positive outlook for 2025. However, technical indicators suggest potential price weakness, and the valuation appears fair. The absence of a dividend yield limits attractiveness for income-focused investors. Historical volatility in financial performance necessitates ongoing monitoring.

Positive Factors

Acquisition

The Grover Gaming acquisition is expected to strengthen revenue diversification for Light & Wonder.

Financial Performance

The company reported full-year revenue of $3.2B and AEBITDA of $1.24B, both showing significant year-over-year growth.

Market Position

Light & Wonder maintains the #1 ship share position in North America and Australia, highlighting its strong competitive standing.

Negative Factors

Legal Challenges

Investors should take advantage of the stock pullback following the unfavorable court ruling on Dragon Train.

Market Comparisons

Gaming revenue growth decelerated due to tougher comparisons and the impact of an injunction, though a return to normalized growth is expected in 2025.

Sales Performance

Machine Sales: Gaming sales were lower than expected, with 4Q24 revenue impacted by lower international units.

Light & Wonder Business Overview & Revenue Model

Company Description

Light & Wonder, Inc. develops technology-based products and services, and related content for the gaming, lottery, social and digital gaming industries in the United States and internationally. The company's Gaming segment sells new and used gaming machines, electronic table systems, video lottery terminals, conversion game kits, and spare parts; table products, including shufflers; and perpetual licenses to proprietary table games. It also supplies game content, gaming machines; provides table game products and services to licensed gaming entities; and installs and supports casino management systems, such as ongoing hardware and software maintenance and upgrade services of customer casino management systems. The company's SciPlay segment develops and publishes digital games on mobile and web platforms. It sells virtual coins, chips, or bingo cards, which players can use to play slot games, table games, or bingo games. Its iGaming segment provides a suite of digital gaming content, including digital real-money gaming, distribution platforms, content, products, and services. This segment also offers the Open Platform System, which offers a range of reporting and administrative functions and tools providing operators control over various areas of digital gaming operations. The company also offers software design, development, licensing, maintenance, support services, and technology solutions. Light & Wonder, Inc. was incorporated in 1984 and is based in Las Vegas, Nevada.

How the Company Makes Money

Light & Wonder generates revenue through a variety of streams, primarily from the sale, lease, and licensing of gaming content and technology to casinos and gaming operators worldwide. The company earns money through its gaming machines, which are sold or leased to gaming venues, as well as through participation agreements where they share in the revenue generated by their machines on casino floors. Additionally, Light & Wonder licenses its digital gaming content to online gaming platforms, contributing to its interactive gaming revenue. The company also benefits from its lottery segment by providing lottery systems and services to governments and operators. Significant partnerships with casinos, online gaming platforms, and lottery operators further bolster its revenue, along with strategic acquisitions that expand its market reach and product offerings.

Light & Wonder Financial Statement Overview

Summary

Light & Wonder has demonstrated strong revenue growth and profitability improvements, reflected in its income statement. The balance sheet shows significant improvement in leverage, though the equity base remains small, posing potential risks. Cash flow generation is stable but could benefit from better efficiency in converting earnings into cash. Overall, the company is on an upward trajectory with notable strengths in profitability and debt management, but historical volatility necessitates careful monitoring.

Income Statement

Light & Wonder has shown impressive revenue growth, with a notable increase from $2,902 million in 2023 to $3,188 million in 2024. The gross profit margin is extremely strong at 100%, indicating efficient management of production costs. Net profit margin improved significantly to 15.87% in 2024, reflecting enhanced profitability. Both EBIT and EBITDA margins are robust at 20.95% and 15.34% respectively, showcasing strong operational performance. However, historical volatility in net income, such as the negative figures in 2020 and 2022, indicates some underlying instability.

Balance Sheet

The company's debt-to-equity ratio has dramatically improved, dropping from a high leverage in prior years to 0.08 in 2024, due to decreased total debt and increased equity. The equity ratio stands at 11.73% in 2024, showing an improved but still modest position compared to liabilities. Return on Equity (ROE) has jumped to 79.56% in 2024, which is a strong indicator of shareholder value creation, yet it also suggests potential risk due to the low equity base.

Cash Flow

Free cash flow has remained stable with a slight decrease from $348 million in 2023 to $338 million in 2024, indicating steady cash generation capability. The operating cash flow to net income ratio is favorable at 1.25, demonstrating effective conversion of net income into cash. However, free cash flow to net income ratio is lower at 0.67, indicating room for improvement in cash conversion efficiency. Historical fluctuations, such as negative free cash flow in 2022, highlight potential risks.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.19B	2.90B	2.51B	2.15B	2.72B
	Gross Profit
2.26B	2.03B	1.77B	1.54B	1.56B
	EBIT
668.00M	518.00M	273.00M	351.00M	80.00M
	EBITDA
1.07B	898.00M	591.00M	749.00M	163.00M
	Net Income Common Stockholders
336.00M	163.00M	-176.00M	24.00M	-548.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
196.00M	425.00M	914.00M	585.00M	1.02B
	Total Assets
5.42B	5.55B	6.01B	7.88B	7.98B
	Total Debt
54.00M	3.93B	3.93B	8.73B	9.38B
	Net Debt
-142.00M	3.51B	3.02B	8.14B	8.36B
	Total Liabilities
4.79B	4.79B	4.85B	9.99B	10.51B
	Stockholders Equity
636.00M	765.00M	1.16B	-2.11B	-2.52B
Cash Flow		Free Cash Flow
338.00M	348.00M	-597.00M	514.00M	281.00M
	Operating Cash Flow
632.00M	590.00M	-381.00M	685.00M	471.00M
	Investing Cash Flow
-258.00M	-251.00M	6.12B	-442.00M	-173.00M
	Financing Cash Flow
-577.00M	-292.00M	-5.46B	-679.00M	463.00M

Light & Wonder Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 78.09
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LNW, the sentiment is Negative. The current price of 78.09 is below the 20-day moving average (MA) of 94.09, below the 50-day MA of 97.29, and below the 200-day MA of 97.81, indicating a bearish trend. The MACD of -2.12 indicates Positive momentum. The RSI at 31.29 is Neutral, neither overbought nor oversold. The STOCH value of 10.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LNW.

Light & Wonder Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IGT	74 Outperform	$3.22B	9.35	8.08%	5.01%	-22.16%	123.24%
LNW	71 Outperform	$7.08B	21.19	47.97%	―	9.82%	109.44%
LVS	68 Neutral	$23.83B	17.19	41.30%	2.52%	8.93%	22.50%
MGM	66 Neutral	$8.47B	12.52	21.76%	―	6.66%	-24.59%
DKNG	60 Neutral	$32.00B	―	-54.81%	―	30.07%	39.93%
Sector *	59 Neutral	$11.76B	10.11	-0.70%	3.92%	1.27%	-16.30%

Light & Wonder Corporate Events

Light & Wonder Submits CHESS Depositary Interests Statement

On April 8, 2025, Light & Wonder, Inc. announced the submission of its Statement of CHESS Depositary Interests on Issue (Appendix 4A) to the Australian Securities Exchange, reflecting changes in its issued capital for March 2025. The report highlighted a net increase in the number of CDIs and common stock due to transfers between CDIs and common stock, share repurchases, and the vesting of restricted stock units and exercise of options, indicating active management of its equity structure.

Spark’s Take on LNW Stock

According to Spark, TipRanks’ AI Analyst, LNW is a Neutral.

Light & Wonder demonstrates solid financial performance with significant revenue growth and profitability improvements. However, technical indicators show the stock may be under pressure, and while the valuation is moderate, it does not offer a dividend yield. The positive sentiment from the earnings call and strategic acquisitions provides confidence in the company’s future growth. The overall score reflects a balance of strong fundamentals and potential near-term challenges.

To see Spark’s full report on LNW stock, click here.

Light & Wonder to Acquire Grover Gaming Assets

On February 17, 2025, Light & Wonder, Inc. announced a definitive agreement to acquire the charitable gaming assets of Grover Gaming, Inc. and G2 Gaming, Inc. for $850 million, with a potential earn-out of up to $200 million. This acquisition, expected to close in the second quarter of 2025, positions Light & Wonder as a leader in the fast-growing charitable gaming space, enhancing its cross-platform strategy and presenting new revenue opportunities by integrating Grover’s established customer base with its land-based gaming content.

Light & Wonder Reports on CHESS Depositary Interests

On February 7, 2025, Light & Wonder, Inc. announced to the Australian Securities Exchange (ASX) a new statement of CHESS Depositary Interests on Issue through Appendix 4A. This report showed a reduction in both CHESS Depositary Interests and common stock, indicating a net transfer between these securities and changes due to share repurchase and vesting of options.

Light & Wonder’s Regulatory Disclosure Update

Light & Wonder, Inc. has provided the Australian Securities Exchange with a Statement of CHESS Depositary Interests on Issue, which is reported in their current Form 8-K. This release is part of the company’s regulatory compliance and does not imply any changes to its financial filings or liabilities under the Securities Exchange Act of 1934.