LIGHT & WONDER INC (LNW) Stock Fundamental Analysis
NASDAQ:LNW - Nasdaq - US80874P1093 - Common Stock - Currency: USD
LNW gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 132 industry peers in the Hotels, Restaurants & Leisure industry. LNW has an excellent profitability rating, but there are some minor concerns on its financial health. LNW has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year LNW was profitable.
LNW had a positive operating cash flow in the past year.
Of the past 5 years LNW 4 years were profitable.
LNW had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.16%, LNW is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
With an excellent Return On Equity value of 54.19%, LNW belongs to the best of the industry, outperforming 94.70% of the companies in the same industry.
The Return On Invested Capital of LNW (13.90%) is better than 81.06% of its industry peers.
The Average Return On Invested Capital over the past 3 years for LNW is below the industry average of 13.91%.
The last Return On Invested Capital (13.90%) for LNW is above the 3 year average (10.25%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.16% | ||
| ROE | 54.19% | ||
| ROIC | 13.9% |
ROA(3y)23.43%
ROA(5y)13.57%
ROE(3y)148.45%
ROE(5y)N/A
ROIC(3y)10.25%
ROIC(5y)N/A
1.3 Margins
LNW's Profit Margin of 10.48% is fine compared to the rest of the industry. LNW outperforms 76.52% of its industry peers.
In the last couple of years the Profit Margin of LNW has declined.
LNW has a better Operating Margin (24.33%) than 87.88% of its industry peers.
In the last couple of years the Operating Margin of LNW has grown nicely.
Looking at the Gross Margin, with a value of 71.18%, LNW belongs to the top of the industry, outperforming 86.36% of the companies in the same industry.
In the last couple of years the Gross Margin of LNW has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.33% | ||
| PM (TTM) | 10.48% | ||
| GM | 71.18% |
OM growth 3Y22.93%
OM growth 5Y12.62%
PM growth 3Y-15.12%
PM growth 5YN/A
GM growth 3Y-0.43%
GM growth 5Y0.59%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), LNW is creating some value.
The number of shares outstanding for LNW has been reduced compared to 1 year ago.
The number of shares outstanding for LNW has been reduced compared to 5 years ago.
LNW has a worse debt/assets ratio than last year.
2.2 Solvency
LNW has an Altman-Z score of 2.46. This is not the best score and indicates that LNW is in the grey zone with still only limited risk for bankruptcy at the moment.
LNW's Altman-Z score of 2.46 is fine compared to the rest of the industry. LNW outperforms 63.64% of its industry peers.
The Debt to FCF ratio of LNW is 10.94, which is on the high side as it means it would take LNW, 10.94 years of fcf income to pay off all of its debts.
LNW's Debt to FCF ratio of 10.94 is in line compared to the rest of the industry. LNW outperforms 59.09% of its industry peers.
LNW has a Debt/Equity ratio of 6.26. This is a high value indicating a heavy dependency on external financing.
LNW's Debt to Equity ratio of 6.26 is on the low side compared to the rest of the industry. LNW is outperformed by 65.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.26 | ||
| Debt/FCF | 10.94 | ||
| Altman-Z | 2.46 |
ROIC/WACC1.45
WACC9.6%
2.3 Liquidity
LNW has a Current Ratio of 1.57. This is a normal value and indicates that LNW is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of LNW (1.57) is better than 76.52% of its industry peers.
A Quick Ratio of 1.35 indicates that LNW should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.35, LNW is doing good in the industry, outperforming 72.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.57 | ||
| Quick Ratio | 1.35 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 55.60% over the past year.
Measured over the past 5 years, LNW shows a small growth in Earnings Per Share. The EPS has been growing by 5.53% on average per year.
Looking at the last year, LNW shows a small growth in Revenue. The Revenue has grown by 7.26% in the last year.
The Revenue has been growing slightly by 5.95% on average over the past years.
EPS 1Y (TTM)55.6%
EPS 3Y5.53%
EPS 5YN/A
EPS Q2Q%6.82%
Revenue 1Y (TTM)7.26%
Revenue growth 3Y13.98%
Revenue growth 5Y5.95%
Sales Q2Q%2.38%
3.2 Future
LNW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.60% yearly.
LNW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.85% yearly.
EPS Next Y57.15%
EPS Next 2Y38.9%
EPS Next 3Y34.24%
EPS Next 5Y20.6%
Revenue Next Year7.65%
Revenue Next 2Y7.57%
Revenue Next 3Y6.72%
Revenue Next 5Y4.85%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 25.77 indicates a quite expensive valuation of LNW.
Compared to the rest of the industry, the Price/Earnings ratio of LNW indicates a somewhat cheap valuation: LNW is cheaper than 60.61% of the companies listed in the same industry.
LNW's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.19.
A Price/Forward Earnings ratio of 13.58 indicates a correct valuation of LNW.
LNW's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. LNW is cheaper than 78.03% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of LNW to the average of the S&P500 Index (35.33), we can say LNW is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.77 | ||
| Fwd PE | 13.58 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LNW is valued a bit cheaper than 68.18% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of LNW indicates a somewhat cheap valuation: LNW is cheaper than 72.73% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.84 | ||
| EV/EBITDA | 10.54 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
LNW has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as LNW's earnings are expected to grow with 34.24% in the coming years.
PEG (NY)0.45
PEG (5Y)N/A
EPS Next 2Y38.9%
EPS Next 3Y34.24%
5. Dividend
5.1 Amount
LNW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
96.65
-1.22 (-1.25%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners69.15%
Inst Owner ChangeN/A
Ins Owners0.54%
Ins Owner Change5.15%
Market Cap8.16B
Analysts76.84
Price Target111.31 (15.17%)
Short Float %5.28%
Short Ratio4.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.76%
Min EPS beat(2)-18.02%
Max EPS beat(2)25.54%
EPS beat(4)1
Avg EPS beat(4)-10.28%
Min EPS beat(4)-35.43%
Max EPS beat(4)25.54%
EPS beat(8)4
Avg EPS beat(8)-0.85%
EPS beat(12)6
Avg EPS beat(12)4749.38%
EPS beat(16)10
Avg EPS beat(16)3680.74%
Revenue beat(2)0
Avg Revenue beat(2)-3.03%
Min Revenue beat(2)-4.96%
Max Revenue beat(2)-1.11%
Revenue beat(4)1
Avg Revenue beat(4)-1.5%
Min Revenue beat(4)-4.96%
Max Revenue beat(4)1.55%
Revenue beat(8)5
Avg Revenue beat(8)0.96%
Revenue beat(12)9
Avg Revenue beat(12)1.63%
Revenue beat(16)11
Avg Revenue beat(16)-2.31%
PT rev (1m)0.13%
PT rev (3m)-4.64%
EPS NQ rev (1m)1.76%
EPS NQ rev (3m)0.17%
EPS NY rev (1m)2.44%
EPS NY rev (3m)0.73%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-1.12%
Revenue NY rev (1m)0.14%
Revenue NY rev (3m)-0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.77 | ||
| Fwd PE | 13.58 | ||
| P/S | 2.54 | ||
| P/FCF | 22.84 | ||
| P/OCF | 12.62 | ||
| P/B | 13.15 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.54 |
EPS(TTM)3.75
EY3.88%
EPS(NY)7.12
Fwd EY7.37%
FCF(TTM)4.23
FCFY4.38%
OCF(TTM)7.66
OCFY7.92%
SpS37.99
BVpS7.35
TBVpS-34.3
PEG (NY)0.45
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.16% | ||
| ROE | 54.19% | ||
| ROCE | 16.59% | ||
| ROIC | 13.9% | ||
| ROICexc | 14.31% | ||
| ROICexgc | 62.02% | ||
| OM | 24.33% | ||
| PM (TTM) | 10.48% | ||
| GM | 71.18% | ||
| FCFM | 11.14% |
ROA(3y)23.43%
ROA(5y)13.57%
ROE(3y)148.45%
ROE(5y)N/A
ROIC(3y)10.25%
ROIC(5y)N/A
ROICexc(3y)11.23%
ROICexc(5y)N/A
ROICexgc(3y)64.46%
ROICexgc(5y)N/A
ROCE(3y)12.23%
ROCE(5y)N/A
ROICexcg growth 3Y87.73%
ROICexcg growth 5Y32.71%
ROICexc growth 3Y57.06%
ROICexc growth 5Y29.38%
OM growth 3Y22.93%
OM growth 5Y12.62%
PM growth 3Y-15.12%
PM growth 5YN/A
GM growth 3Y-0.43%
GM growth 5Y0.59%
F-Score7
Asset Turnover0.59
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.26 | ||
| Debt/FCF | 10.94 | ||
| Debt/EBITDA | 3.4 | ||
| Cap/Depr | 80.06% | ||
| Cap/Sales | 9.01% | ||
| Interest Coverage | 2.82 | ||
| Cash Conversion | 56.62% | ||
| Profit Quality | 106.25% | ||
| Current Ratio | 1.57 | ||
| Quick Ratio | 1.35 | ||
| Altman-Z | 2.46 |
F-Score7
WACC9.6%
ROIC/WACC1.45
Cap/Depr(3y)65.3%
Cap/Depr(5y)54.63%
Cap/Sales(3y)8.72%
Cap/Sales(5y)9.06%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)55.6%
EPS 3Y5.53%
EPS 5YN/A
EPS Q2Q%6.82%
EPS Next Y57.15%
EPS Next 2Y38.9%
EPS Next 3Y34.24%
EPS Next 5Y20.6%
Revenue 1Y (TTM)7.26%
Revenue growth 3Y13.98%
Revenue growth 5Y5.95%
Sales Q2Q%2.38%
Revenue Next Year7.65%
Revenue Next 2Y7.57%
Revenue Next 3Y6.72%
Revenue Next 5Y4.85%
EBIT growth 1Y17.29%
EBIT growth 3Y40.12%
EBIT growth 5Y19.32%
EBIT Next Year91.68%
EBIT Next 3Y30.93%
EBIT Next 5Y17.78%
FCF growth 1Y169.19%
FCF growth 3Y-13.04%
FCF growth 5Y5.31%
OCF growth 1Y322.76%
OCF growth 3Y-2.65%
OCF growth 5Y2.97%