Light & Wonder (LNW) AI Stock Analysis

• Market Cap: $7.11B
• Dividend Yield: N/A
• Average Volume (3M): 1.06M
• Price to Earnings (P/E): 22.5
• Beta (1Y): 1.19
• Revenue Growth: 7.26%
• EPS Growth: 54.83%
• Country: US
• Employees: 6,800
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Gambling, Resorts & Casinos
• EPS (TTM): 0.94
• Shares Outstanding: 84,378,630
• 10 Day Avg. Volume: 947,620
• 30 Day Avg. Volume: 1,060,273
• PEG Ratio: 0.31
• Price to Book (P/B): -1.18
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 9.54
• Enterprise Value/Market Cap: 1.55
• Enterprise Value/Revenue: 0.87
• Enterprise Value/Gross Profit: 4.82
• Enterprise Value/Ebitda: 2.72
• 1Y Price Target: $110.59
• Price Target Upside: 28.22% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 77 Outperform
• Price Target: $99.00 ▲(14.78%Upside)

Light & Wonder's strong financial performance, buoyed by solid profitability and strategic growth initiatives, leads to a favorable stock outlook. The positive momentum from the earnings call and strategic acquisitions further enhance this view. However, valuation concerns and technical indicators suggest caution in the long-term perspective.

Positive Factors

Management Strategy

Light & Wonder enters its next growth phase with a highly credible management team that has executed a multi-year transformation into a high-margin, content-led global games company.

Market Position

Light & Wonder leads in global game sales, casino systems, and content share, holding a 45% global systems share and commanding 40% of new premium/WAP content and 28% of new core game content in the U.S. and Canada.

Valuation

The company's shares currently trade at a P/E multiple of 13.9x, which is a discount compared to the peer average of 17.5x, suggesting an undervalued stock.

Negative Factors

Financial Performance

Light & Wonder’s Q1 2025 results came in below consensus expectations, with consolidated revenue of $774M vs. $807M and AEBITDA of $311M vs. $313M.

Litigation and Tariffs

There is little new information on Light & Wonder's pending intellectual property litigation and efforts to mitigate tariffs, which could pose risks.

Revenue Forecast

Revenue estimates for 2025 and 2026 have been lowered based on 1Q25 results and management comments.

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 multiple streams, primarily from its three main business segments: Gaming, SciPlay, and iGaming. In the Gaming segment, the company earns money by selling gaming machines, casino management systems, and offering related services to land-based casinos. SciPlay, its social gaming division, contributes to revenue through the sale of virtual goods and in-game purchases in its suite of mobile and web-based games. The iGaming segment focuses on providing digital real-money gaming solutions, where Light & Wonder earns through licensing its gaming content, platforms, and services to online casino operators. Additionally, the company benefits from long-term contracts and partnerships with lottery operators, where it supplies lottery products and technology solutions. These diverse revenue streams, combined with strategic partnerships and a strong brand presence, drive Light & Wonder's financial performance.

Light & Wonder Financial Statement Overview

Summary

Strong profitability with a gross profit margin of 71.2% and a consistent net profit margin of 10.5%. Despite a decrease in free cash flow, operating cash flow remains robust. The reduced debt-to-equity ratio highlights improved leverage management, though the low equity ratio suggests potential risk.

Income Statement

Light & Wonder shows strong profitability with a TTM gross profit margin of 71.2% and a consistent net profit margin of 10.5%. Revenue growth is steady at 1.5% annually, indicating stable demand in the gambling and resort sector. The EBIT margin of 22.0% and EBITDA margin of 28.2% reflect efficient operational management.

Balance Sheet

The company has significantly improved its financial position, with the debt-to-equity ratio reduced to 0.08, highlighting reduced leverage risk. ROE is robust at 54.2%, indicating strong returns to equity holders. However, the equity ratio of 11.4% suggests a relatively thin capital base compared to total assets, which could pose risks if liabilities increase.

Cash Flow

Free cash flow has decreased by 13.6% from the previous period, but the operating cash flow to net income ratio of 1.9 indicates strong cash generation relative to earnings. The free cash flow to net income ratio of 0.87 shows that the company effectively converts earnings into cash.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.21B	3.19B	2.90B	2.51B	2.15B	2.72B
	Gross Profit
2.28B	2.26B	2.03B	1.77B	1.54B	1.56B
	EBIT
706.00M	668.00M	518.00M	273.00M	351.00M	80.00M
	EBITDA
903.00M	1.09B	898.00M	591.00M	749.00M	163.00M
	Net Income Common Stockholders
336.00M	336.00M	163.00M	-176.00M	24.00M	-548.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
134.00M	196.00M	425.00M	914.00M	585.00M	1.02B
	Total Assets
5.46B	5.42B	5.55B	6.01B	7.88B	7.98B
	Total Debt
52.00M	3.92B	3.93B	3.93B	8.73B	9.38B
	Net Debt
-82.00M	3.72B	3.51B	3.02B	8.14B	8.36B
	Total Liabilities
4.83B	4.79B	4.79B	4.85B	9.99B	10.51B
	Stockholders Equity
620.00M	636.00M	765.00M	1.16B	-2.11B	-2.52B
Cash Flow		Free Cash Flow
292.00M	338.00M	348.00M	-597.00M	514.00M	281.00M
	Operating Cash Flow
638.00M	632.00M	590.00M	-381.00M	685.00M	471.00M
	Investing Cash Flow
-249.00M	-258.00M	-251.00M	6.12B	-442.00M	-173.00M
	Financing Cash Flow
-679.00M	-573.00M	-292.00M	-5.46B	-679.00M	463.00M

Light & Wonder Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 86.25
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 86.25 is below the 20-day moving average (MA) of 86.62, above the 50-day MA of 84.86, and below the 200-day MA of 93.42, indicating a neutral trend. The MACD of -0.26 indicates Positive momentum. The RSI at 49.59 is Neutral, neither overbought nor oversold. The STOCH value of 24.46 is Neutral, 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
LNW	77 Outperform	$7.11B	22.54	46.19%	―	7.26%	54.83%
LVS	73 Outperform	$30.25B	23.86	39.21%	2.33%	-0.09%	-13.07%
MGM	71 Outperform	$9.33B	15.36	21.38%	―	2.76%	-14.31%
IGT	69 Neutral	$3.05B	10.48	1.33%	5.48%	-33.50%	35.81%
Sector *	62 Neutral	$6.86B	11.07	2.77%	4.27%	2.66%	-24.95%
DKNG	59 Neutral	$33.67B	―	-46.78%	―	22.86%	30.40%

Light & Wonder Corporate Events

Light & Wonder Holds Annual Stockholders Meeting

On June 10, 2025, Light & Wonder held its annual meeting of stockholders where key decisions were made, including the election of board members, approval of executive compensation, amendment of the 2003 Plan, and ratification of Deloitte & Touche LLP as the independent auditor for 2025. Additionally, on June 6, 2025, the company provided the Australian Securities Exchange with a Statement of CHESS Depositary Interests, reflecting changes in the number of CDIs and common stock due to transfers and share repurchase activities.

The most recent analyst rating on (LNW) stock is a Buy with a $118.00 price target. To see the full list of analyst forecasts on Light & Wonder stock, see the LNW Stock Forecast page.

Light & Wonder Secures Loan for Grover Gaming Acquisition

On May 15, 2025, Light and Wonder International, Inc. entered into a new credit agreement with several financial institutions, securing an $800 million term loan to finance its acquisition of Grover Gaming’s charitable gaming business. The following day, the company completed the acquisition for $850 million, with an additional earn-out of up to $200 million, enhancing its position in the charitable gaming market.

The most recent analyst rating on (LNW) stock is a Buy with a $118.00 price target. To see the full list of analyst forecasts on Light & Wonder stock, see the LNW Stock Forecast page.

Light & Wonder Increases CDIs on ASX in April

On May 6, 2025, Light & Wonder, Inc. announced the submission of a Statement of CHESS Depositary Interests on Issue to the Australian Securities Exchange. The statement revealed a net increase of 5,380,921 CDIs quoted on ASX for April 2025, attributed to net transfers between CDIs and common stock, while the common stock saw a decrease due to share repurchases and other adjustments.

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.