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LIGHT & WONDER INC (LNW) Stock Fundamental Analysis

NASDAQ:LNW - Nasdaq - US80874P1093 - Common Stock - Currency: USD

101.83  -3.06 (-2.92%)

After market: 101.83 0 (0%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to LNW. LNW was compared to 135 industry peers in the Hotels, Restaurants & Leisure industry. While LNW has a great profitability rating, there are some minor concerns on its financial health. LNW has a correct valuation and a medium growth rate.


Dividend Valuation Growth Profitability Health

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7

1. Profitability

1.1 Basic Checks

LNW had positive earnings in the past year.
LNW had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: LNW reported negative net income in multiple years.
LNW had a positive operating cash flow in 4 of the past 5 years.
LNW Yearly Net Income VS EBIT VS OCF VS FCFLNW Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 1B -1B 2B 3B

1.2 Ratios

Looking at the Return On Assets, with a value of 5.27%, LNW is in the better half of the industry, outperforming 70.23% of the companies in the same industry.
Looking at the Return On Equity, with a value of 34.38%, LNW belongs to the top of the industry, outperforming 88.55% of the companies in the same industry.
LNW has a Return On Invested Capital of 13.59%. This is in the better half of the industry: LNW outperforms 79.39% of its industry peers.
LNW had an Average Return On Invested Capital over the past 3 years of 7.15%. This is below the industry average of 10.79%.
The last Return On Invested Capital (13.59%) for LNW is above the 3 year average (7.15%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 5.27%
ROE 34.38%
ROIC 13.59%
ROA(3y)22.93%
ROA(5y)12%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)7.15%
ROIC(5y)N/A
LNW Yearly ROA, ROE, ROICLNW Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 100 200 300

1.3 Margins

Looking at the Profit Margin, with a value of 9.33%, LNW is in the better half of the industry, outperforming 73.28% of the companies in the same industry.
The Operating Margin of LNW (24.07%) is better than 85.50% of its industry peers.
In the last couple of years the Operating Margin of LNW has grown nicely.
With an excellent Gross Margin value of 70.43%, LNW belongs to the best of the industry, outperforming 85.50% of the companies in the same industry.
In the last couple of years the Gross Margin of LNW has grown nicely.
Industry RankSector Rank
OM 24.07%
PM (TTM) 9.33%
GM 70.43%
OM growth 3YN/A
OM growth 5Y6.52%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.96%
GM growth 5Y2.22%
LNW Yearly Profit, Operating, Gross MarginsLNW Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 50 -50 100

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5

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so LNW is still 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.
The debt/assets ratio for LNW is higher compared to a year ago.
LNW Yearly Shares OutstandingLNW Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M 80M
LNW Yearly Total Debt VS Total AssetsLNW Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B 8B

2.2 Solvency

An Altman-Z score of 2.54 indicates that LNW is not a great score, but indicates only limited risk for bankruptcy at the moment.
LNW's Altman-Z score of 2.54 is fine compared to the rest of the industry. LNW outperforms 69.47% of its industry peers.
LNW has a debt to FCF ratio of 12.37. This is a negative value and a sign of low solvency as LNW would need 12.37 years to pay back of all of its debts.
With a Debt to FCF ratio value of 12.37, LNW perfoms like the industry average, outperforming 55.73% of the companies in the same industry.
LNW has a Debt/Equity ratio of 4.49. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of LNW (4.49) is worse than 60.31% of its industry peers.
Industry RankSector Rank
Debt/Equity 4.49
Debt/FCF 12.37
Altman-Z 2.54
ROIC/WACC1.36
WACC10.02%
LNW Yearly LT Debt VS Equity VS FCFLNW Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2B -2B 4B 6B 8B

2.3 Liquidity

A Current Ratio of 1.88 indicates that LNW should not have too much problems paying its short term obligations.
With an excellent Current ratio value of 1.88, LNW belongs to the best of the industry, outperforming 83.21% of the companies in the same industry.
A Quick Ratio of 1.61 indicates that LNW should not have too much problems paying its short term obligations.
LNW has a better Quick ratio (1.61) than 78.63% of its industry peers.
Industry RankSector Rank
Current Ratio 1.88
Quick Ratio 1.61
LNW Yearly Current Assets VS Current LiabilitesLNW Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

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4

3. Growth

3.1 Past

LNW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 138.52%, which is quite impressive.
The Revenue has grown by 12.37% in the past year. This is quite good.
The Revenue has been decreasing by -2.91% on average over the past years.
EPS 1Y (TTM)138.52%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-12.35%
Revenue 1Y (TTM)12.37%
Revenue growth 3Y19.54%
Revenue growth 5Y-2.91%
Sales Q2Q%11.76%

3.2 Future

The Earnings Per Share is expected to grow by 32.06% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 5.42% on average over the next years.
EPS Next Y101.45%
EPS Next 2Y76.38%
EPS Next 3Y56.58%
EPS Next 5Y32.06%
Revenue Next Year10.67%
Revenue Next 2Y8.8%
Revenue Next 3Y7.87%
Revenue Next 5Y5.42%

3.3 Evolution

The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
LNW Yearly Revenue VS EstimatesLNW Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 1B 2B 3B 4B
LNW Yearly EPS VS EstimatesLNW Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 0 10 -10 20 30

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5

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 31.62, LNW can be considered very expensive at the moment.
LNW's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of LNW to the average of the S&P500 Index (29.63), we can say LNW is valued inline with the index average.
A Price/Forward Earnings ratio of 18.60 indicates a rather expensive valuation of LNW.
67.18% of the companies in the same industry are more expensive than LNW, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.68. LNW is around the same levels.
Industry RankSector Rank
PE 31.62
Fwd PE 18.6
LNW Price Earnings VS Forward Price EarningsLNW Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LNW indicates a somewhat cheap valuation: LNW is cheaper than 60.31% of the companies listed in the same industry.
68.70% of the companies in the same industry are more expensive than LNW, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 28.73
EV/EBITDA 11.17
LNW Per share dataLNW EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 -20

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.
The decent profitability rating of LNW may justify a higher PE ratio.
LNW's earnings are expected to grow with 56.58% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.31
PEG (5Y)N/A
EPS Next 2Y76.38%
EPS Next 3Y56.58%

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0

5. Dividend

5.1 Amount

LNW does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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LIGHT & WONDER INC

NASDAQ:LNW (2/21/2025, 8:00:00 PM)

After market: 101.83 0 (0%)

101.83

-3.06 (-2.92%)

Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)11-12 2024-11-12/amc
Earnings (Next)02-25 2025-02-25/amc
Inst Owners68.26%
Inst Owner ChangeN/A
Ins Owners0.42%
Ins Owner Change1.79%
Market Cap8.99B
Analysts75.56
Price Target111.76 (9.75%)
Short Float %3.08%
Short Ratio4.63
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly Dividend0
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-24.32%
Min EPS beat(2)-35.43%
Max EPS beat(2)-13.21%
EPS beat(4)2
Avg EPS beat(4)-1.97%
Min EPS beat(4)-35.43%
Max EPS beat(4)33.43%
EPS beat(8)3
Avg EPS beat(8)-6.85%
EPS beat(12)7
Avg EPS beat(12)4807.43%
EPS beat(16)10
Avg EPS beat(16)3678.07%
Revenue beat(2)1
Avg Revenue beat(2)0.02%
Min Revenue beat(2)-1.5%
Max Revenue beat(2)1.55%
Revenue beat(4)3
Avg Revenue beat(4)1.43%
Min Revenue beat(4)-1.5%
Max Revenue beat(4)3.57%
Revenue beat(8)7
Avg Revenue beat(8)2.73%
Revenue beat(12)11
Avg Revenue beat(12)2.41%
Revenue beat(16)11
Avg Revenue beat(16)-6.31%
PT rev (1m)-0.56%
PT rev (3m)1.23%
EPS NQ rev (1m)1.75%
EPS NQ rev (3m)-13.69%
EPS NY rev (1m)0.63%
EPS NY rev (3m)-11.34%
Revenue NQ rev (1m)-0.17%
Revenue NQ rev (3m)-3.72%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)-0.53%
Valuation
Industry RankSector Rank
PE 31.62
Fwd PE 18.6
P/S 2.84
P/FCF 28.73
P/OCF 15.06
P/B 10.48
P/tB N/A
EV/EBITDA 11.17
EPS(TTM)3.22
EY3.16%
EPS(NY)5.48
Fwd EY5.38%
FCF(TTM)3.54
FCFY3.48%
OCF(TTM)6.76
OCFY6.64%
SpS35.81
BVpS9.72
TBVpS-31.23
PEG (NY)0.31
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 5.27%
ROE 34.38%
ROCE 15.48%
ROIC 13.59%
ROICexc 14.62%
ROICexgc 70.11%
OM 24.07%
PM (TTM) 9.33%
GM 70.43%
FCFM 9.9%
ROA(3y)22.93%
ROA(5y)12%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)7.15%
ROIC(5y)N/A
ROICexc(3y)8.08%
ROICexc(5y)N/A
ROICexgc(3y)48.32%
ROICexgc(5y)N/A
ROCE(3y)8.14%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y18.5%
ROICexc growth 3YN/A
ROICexc growth 5Y12.68%
OM growth 3YN/A
OM growth 5Y6.52%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.96%
GM growth 5Y2.22%
F-Score7
Asset Turnover0.57
Health
Industry RankSector Rank
Debt/Equity 4.49
Debt/FCF 12.37
Debt/EBITDA 3.36
Cap/Depr 73.96%
Cap/Sales 8.98%
Interest Coverage 2.6
Cash Conversion 52.14%
Profit Quality 106.1%
Current Ratio 1.88
Quick Ratio 1.61
Altman-Z 2.54
F-Score7
WACC10.02%
ROIC/WACC1.36
Cap/Depr(3y)52.47%
Cap/Depr(5y)47.15%
Cap/Sales(3y)8.29%
Cap/Sales(5y)9.6%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)138.52%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-12.35%
EPS Next Y101.45%
EPS Next 2Y76.38%
EPS Next 3Y56.58%
EPS Next 5Y32.06%
Revenue 1Y (TTM)12.37%
Revenue growth 3Y19.54%
Revenue growth 5Y-2.91%
Sales Q2Q%11.76%
Revenue Next Year10.67%
Revenue Next 2Y8.8%
Revenue Next 3Y7.87%
Revenue Next 5Y5.42%
EBIT growth 1Y34.22%
EBIT growth 3YN/A
EBIT growth 5Y3.42%
EBIT Next Year114.52%
EBIT Next 3Y36.93%
EBIT Next 5Y20.44%
FCF growth 1Y212.19%
FCF growth 3Y7.39%
FCF growth 5YN/A
OCF growth 1Y977.94%
OCF growth 3Y7.8%
OCF growth 5Y11.26%