Light & Wonder (LNWO)
OTHER OTC:LNWO
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Light & Wonder
(OTC:LNWO)
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Rating:63Neutral
Price Target:
$90.00
▲(5.99% Upside)
Action:ReiteratedDate:02/25/26
The score reflects solid underlying financial momentum led by strong cash flow and improving profitability, reinforced by a positive forward outlook from the latest earnings call. These positives are tempered by weak current technical signals and lingering balance-sheet/leverage credibility concerns, while valuation appears fair but not clearly cheap and offers no dividend support.
Positive Factors
Strong cash generation
Sustained operating cash flow ($794M) and solid free cash flow ($484M) in 2025 provide durable internal funding for R&D, Grover integration, buybacks and deleveraging. Free cash flow tracking ~53%–61% of net income supports earnings quality and financial flexibility.
Negative Factors
Balance-sheet credibility
A dramatic reported debt drop creates uncertainty: prior years showed heavy leverage and modest equity ($636M). Without clarity on the accounting or one-time adjustments, modeling leverage, covenant risk and true financial flexibility remains uncertain and warrants caution.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Sustained operating cash flow ($794M) and solid free cash flow ($484M) in 2025 provide durable internal funding for R&D, Grover integration, buybacks and deleveraging. Free cash flow tracking ~53%–61% of net income supports earnings quality and financial flexibility.
Read all positive factors
Light & Wonder (LNWO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.61B
Dividend YieldN/A
Average Volume (3M)70.78K
Price to Earnings (P/E)31.0
Beta (1Y)1.12
Revenue Growth1.87%
EPS Growth42.43%
CountryUS
Employees6,800
SectorConsumer Cyclical
Sector Strength84
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)-0.19
Shares Outstanding77,148,710
10 Day Avg. Volume47,556
30 Day Avg. Volume70,784
Financial Highlights & Ratios
PEG Ratio-2.60
Price to Book (P/B)34.92
Price to Sales (P/S)2.58
P/FCF Ratio17.68
Enterprise Value/Market Cap1.80
Enterprise Value/Revenue3.59
Enterprise Value/Gross Profit5.13
Enterprise Value/Ebitda9.44
Forecast
1Y Price Target
$144.00Price Target Upside69.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)6.22
Revenue Forecast (FY)$3.59B
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;...
How the Company Makes Money
Light & Wonder primarily makes money by selling, leasing, and servicing gaming products and by earning recurring revenues from game content and platform usage across casino, iGaming, and lottery customers. Key revenue streams typically include: (1...
Light & Wonder Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call presented a predominately positive operational and financial picture: record and recurring revenue growth, strong consolidated AEBITDA and margin expansion, robust cash flow generation, accelerated unit shipments and scaling of the Grover acquisition, plus strategic investments (AI, R&D) and substantial shareholder returns. Material one-time charges (legal settlement, ASX transition costs, contingent acquisition adjustments) and some operational challenges (SciPlay/Jackpot Party, systems/tables timing, UK tax change, tariff impacts) weighed on GAAP profitability and created near-term noise. On balance, the business demonstrated durable recurring revenue momentum, margin sustainability, and a clear plan to delever and pursue growth, with the negatives appearing largely one-time or addressable.Positive Updates
Record and Expanded Revenue Mix
Q4 consolidated revenue of $891M, up 12% year-over-year; full-year consolidated revenue of $3.3B, up 4% from 2024. Recurring revenue of $2.2B with margin and cash-flow expansion across the year.
Negative Updates
Significant One-Time Charges and Q4 Net Loss
Q4 included a $128M settlement related to peer dispute plus other charges (totaling ~$177M restructuring and other), producing a Q4 net loss of $15M. Full-year net income decreased 18% YoY, impacted by $219M of restructuring and other charges.
Read all updates
Q4-2025 Updates
Positive
Negative
Record and Expanded Revenue Mix
Q4 consolidated revenue of $891M, up 12% year-over-year; full-year consolidated revenue of $3.3B, up 4% from 2024. Recurring revenue of $2.2B with margin and cash-flow expansion across the year.
Read all positive updates
Company Guidance
Light & Wonder expects "another year of strong adjusted NPATA and EPSa growth" in 2026 with the shape of earnings broadly similar to 2025 and reiterated its 2028 goals of $2.0 billion consolidated AEBITDA and EPSa > $10.55; near‑term modeling assumptions include a Q1 gaming AEBITDA margin of ~50%, continued North American premium net adds of 500+ units per quarter (ongoing net installed growth), combined R&D+CapEx targeted at ~17% of consolidated revenue (weighted to H1 for Grover ramp/Indiana), an effective tax rate of ~22–24%, and organic deleveraging through 2026 toward the lower end of a 2.5x–3.5x net‑debt leverage range (year‑end leverage was 3.4x). Management will remain opportunistic on buybacks after repurchasing $877M in 2025 (78% of the $1.5B program) and returning $1.9B since 2022; balance‑sheet/cash metrics to model include $927M available liquidity, $5.2B principal debt, a repriced $2.1B term loan (margin to 2% for ~ $5M annual savings), an effective net interest rate of ~6.65% (53% fixed / 47% floating), and strong cash generation trends (FY25 AEBITDA $1.44B; Q4 AEBITDA $405M; EPSa $6.69 in 2025), while noting the U.K. online gaming tax increase to 40% effective Q2'26 and continued SciPlay DTC expansion (25% DTC in Q4'25 vs 30% target by 2028).Light & Wonder Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
54
Neutral
Cash Flow
78
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.31B | 3.19B | 2.90B | 2.51B | 2.15B |
| Gross Profit | 2.02B | 2.26B | 2.03B | 1.77B | 1.54B |
| EBITDA | 1.08B | 1.07B | 898.00M | 584.00M | 582.00M |
| Net Income | 276.00M | 336.00M | 163.00M | 3.67B | 371.00M |
Balance Sheet | |||||
| Total Assets | 6.46B | 5.42B | 5.55B | 6.01B | 7.88B |
| Cash, Cash Equivalents and Short-Term Investments | 167.00M | 196.00M | 425.00M | 914.00M | 585.00M |
| Total Debt | 5.24B | 3.92B | 3.93B | 3.95B | 8.75B |
| Total Liabilities | 6.22B | 4.79B | 4.79B | 4.85B | 9.99B |
| Stockholders Equity | 245.00M | 636.00M | 765.00M | 990.00M | -2.26B |
Cash Flow | |||||
| Free Cash Flow | 484.00M | 338.00M | 348.00M | -597.00M | 514.00M |
| Operating Cash Flow | 794.00M | 632.00M | 590.00M | -381.00M | 685.00M |
| Investing Cash Flow | -1.17B | -258.00M | -251.00M | 6.12B | -442.00M |
| Financing Cash Flow | 321.00M | -577.00M | -788.00M | -5.46B | -679.00M |
Light & Wonder Technical Analysis
Negative
84.91
Price Trends
99.93
Negative
97.85
Negative
93.10
Negative
Market Momentum
-4.73
Negative
44.21
Neutral
68.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LNWO, the sentiment is Negative. The current price of 84.91 is below the 20-day moving average (MA) of 85.76, below the 50-day MA of 99.93, and below the 200-day MA of 93.10, indicating a bearish trend. The MACD of -4.73 indicates Negative momentum. The RSI at 44.21 is Neutral, neither overbought nor oversold. The STOCH value of 68.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LNWO.
Light & Wonder Risk Analysis
Light & Wonder disclosed 51 risk factors in its most recent earnings report. Light & Wonder 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
Light & Wonder Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $6.26B | 3.78 | 91.87% | 0.84% | 5.91% | 336.91% | |
63 Neutral | $6.61B | 31.00 | 48.21% | ― | 1.87% | 42.43% | |
62 Neutral | $9.61B | 46.86 | 7.55% | ― | 0.05% | -94.07% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
57 Neutral | $5.47B | -9.69 | -13.18% | ― | 0.87% | 31.28% | |
54 Neutral | $10.37B | 38.12 | -90.44% | 0.80% | -0.26% | -44.45% | |
44 Neutral | $2.16B | 12.19 | -13.94% | ― | 11.32% | ― |
* Consumer Cyclical Sector Average
LNWO
Light & Wonder
82.82
-3.79
-4.38%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.