Light & Wonder (LNWO) AI Stock Analysis

• Market Cap: $9.86B
• Dividend Yield: N/A
• Average Volume (3M): 143.78K
• Price to Earnings (P/E): 26.1
• Beta (1Y): 1.05
• Revenue Growth: 1.87%
• EPS Growth: 42.43%
• Country: US
• Employees: 6,800
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Gambling, Resorts & Casinos
• EPS (TTM): 1.34
• Shares Outstanding: 81,523,880
• 10 Day Avg. Volume: 121,828
• 30 Day Avg. Volume: 143,782
• PEG Ratio: 0.21
• Price to Book (P/B): 12.09
• Price to Sales (P/S): 2.41
• P/FCF Ratio: 22.75
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 3.64
• Enterprise Value/Gross Profit: 5.00
• Enterprise Value/Ebitda: 9.82
• 1Y Price Target: $105.64
• Price Target Upside: -11.70% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 6.27
• Revenue Forecast (FY): $3.61B

• Rating: 79 Outperform
• Price Target: $137.00 ▲(14.51% Upside)

Light & Wonder's strong financial performance and positive earnings call sentiment are the most significant factors driving the stock score. The technical analysis indicates a strong upward trend, though caution is advised due to overbought signals. The valuation is moderate, with no dividend yield, which slightly tempers the overall attractiveness.

Positive Factors

Revenue Growth

Consistent revenue growth indicates robust business expansion and market demand for LNW's gaming solutions, supporting long-term growth.

Recurring Revenue

High recurring revenue enhances financial stability and predictability, providing a strong foundation for sustainable growth.

iGaming Performance

Strong iGaming growth reflects successful adaptation to digital trends, positioning LNW well in the evolving gaming landscape.

Negative Factors

High Debt Levels

High debt levels can limit financial flexibility and increase risk, especially in volatile market conditions, impacting long-term stability.

International Market Challenges

Challenges in international markets may hinder growth opportunities and revenue diversification, affecting overall business expansion.

Tariff Impacts

Tariff impacts can increase costs and pressure margins, potentially affecting profitability and competitive positioning in the long term.

Light & Wonder Business Overview & Revenue Model

Company Description

Light & Wonder, Inc. operates as a cross-platform games company in the United States and internationally. The company operates through three segments: Gaming, SciPlay, and iGaming segments. The Gaming segment sells game content and gaming machine; video gaming terminals; video lottery terminals, including conversion kits and spare parts; and table game products, including automatic card shufflers, deck checkers, table roulette chip sorters and other land-based table gaming equipment. It also leases or provides gaming content, gaming machines, and server-based system; sells and supports casino-management system based software and hardware; and licenses proprietary table games content to commercial, tribal, and governmental gaming operators. The SciPlay segment develops, markets, and operates social games on various online platforms. It sells virtual coins, chips, or bingo cards, which players can use to play slot games, table games, and bingo games. The iGaming segment provides a suite of digital gaming content, distribution platforms, player account management systems, and other iGaming content 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. Light & Wonder, Inc. was incorporated in 1984 and is headquartered in Las Vegas, Nevada.

How the Company Makes Money

Light & Wonder generates revenue through multiple key streams. The Gaming sector contributes significantly through the sale and lease of gaming machines and equipment, as well as ongoing service and maintenance contracts. In the Digital sector, the company earns revenue from online gaming solutions, including casino games and sports betting platforms, often through partnerships with various online gaming operators. Additionally, Light & Wonder benefits from licensing agreements, where it allows third-party developers to utilize its technology and intellectual property. Strategic partnerships with casinos and gaming companies also enhance its reach and revenue potential, while continuous innovation in gaming technology keeps the company competitive.

Light & Wonder Financial Statement Overview

Summary

Light & Wonder exhibits strong financial performance with significant revenue growth and improved profitability. The company has made strides in managing its leverage, although it still relies heavily on debt. Cash flow generation is robust, supporting operational and strategic initiatives. While the financial outlook is positive, the company should continue to focus on reducing debt levels to mitigate financial risk.

Income Statement

Light & Wonder has demonstrated strong revenue growth, particularly in the TTM period with a 75.1% increase, indicating robust business expansion. The gross profit margin remains healthy at 53.37%, although it has decreased from previous years, suggesting increased cost pressures. The net profit margin improved to 12.39%, reflecting enhanced profitability. EBIT and EBITDA margins are solid, showing effective cost management and operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has improved significantly in the TTM period, indicating better leverage management, although it remains high compared to industry norms. Return on equity is strong at 59.53%, showcasing effective use of equity to generate profits. The equity ratio is relatively low, suggesting a high reliance on debt financing, which could pose risks in volatile market conditions.

Cash Flow

Operating cash flow has improved, with a positive operating cash flow to net income ratio of 1.09, indicating good cash generation relative to earnings. Free cash flow growth is strong at 46.24%, and the free cash flow to net income ratio of 0.57 suggests a healthy conversion of earnings into cash. However, historical fluctuations in cash flow highlight potential volatility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.22B	3.19B	2.90B	2.51B	2.15B	1.70B
Gross Profit	2.34B	2.26B	2.03B	1.77B	1.54B	1.09B
EBITDA	1.19B	1.07B	898.00M	584.00M	582.00M	148.00M
Net Income	399.00M	336.00M	163.00M	3.67B	371.00M	-569.00M
Balance Sheet
Total Assets	6.51B	5.42B	5.55B	6.01B	7.88B	7.98B
Cash, Cash Equivalents and Short-Term Investments	324.00M	196.00M	425.00M	914.00M	585.00M	928.00M
Total Debt	4.99B	3.92B	3.93B	3.95B	8.75B	9.36B
Total Liabilities	5.79B	4.79B	4.79B	4.85B	9.99B	10.51B
Stockholders Equity	723.00M	636.00M	765.00M	990.00M	-2.26B	-2.65B
Cash Flow
Free Cash Flow	389.00M	338.00M	348.00M	-597.00M	514.00M	334.00M
Operating Cash Flow	677.00M	632.00M	590.00M	-381.00M	685.00M	471.00M
Investing Cash Flow	-1.11B	-258.00M	-251.00M	6.12B	-442.00M	-173.00M
Financing Cash Flow	350.00M	-577.00M	-788.00M	-5.46B	-679.00M	463.00M

Light & Wonder Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 119.64
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LNWO, the sentiment is Positive. The current price of 119.64 is above the 20-day moving average (MA) of 107.35, above the 50-day MA of 98.56, and above the 200-day MA of 89.83, indicating a bullish trend. The MACD of 5.99 indicates Negative momentum. The RSI at 71.99 is Negative, neither overbought nor oversold. The STOCH value of 86.01 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LNWO.

Light & Wonder Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LNWO	79 Outperform	$9.86B	26.07	50.47%	―	1.87%	42.43%
BYD	77 Outperform	$7.00B	3.92	87.17%	0.84%	5.91%	336.91%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
MGM	57 Neutral	$9.68B	219.59	2.25%	―	0.05%	-94.07%
MLCO	56 Neutral	$2.63B	23.33	―	―	11.32%	―
WYNN	53 Neutral	$12.20B	25.88	―	0.80%	-0.26%	-44.45%
CZR	51 Neutral	$5.17B	―	-6.06%	―	0.87%	31.28%