LNW gets a fundamental rating of 6 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. A decent growth rate in combination with a cheap valuation! Better keep an eye on LNW. This makes LNW very considerable for value investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year LNW was profitable.
In the past year LNW had a positive cash flow from operations.
Of the past 5 years LNW 4 years were profitable.
Of the past 5 years LNW 4 years had a positive operating cash flow.

1.2 Ratios

LNW has a better Return On Assets (6.13%) than 72.93% of its industry peers.
LNW's Return On Equity of 55.19% is amongst the best of the industry. LNW outperforms 90.98% of its industry peers.
LNW has a Return On Invested Capital of 11.81%. This is in the better half of the industry: LNW outperforms 76.69% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for LNW is in line with the industry average of 10.36%.
The 3 year average ROIC (10.25%) for LNW is below the current ROIC(11.81%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	6.13%
ROE	55.19%
ROIC	11.81%

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

Looking at the Profit Margin, with a value of 12.39%, LNW belongs to the top of the industry, outperforming 80.45% of the companies in the same industry.
In the last couple of years the Profit Margin of LNW has declined.
With an excellent Operating Margin value of 25.77%, LNW belongs to the best of the industry, outperforming 90.23% of the companies in the same industry.
LNW's Operating Margin has improved in the last couple of years.
The Gross Margin of LNW (72.74%) is better than 88.72% of its industry peers.
LNW's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	25.77%
PM (TTM)	12.39%
GM	72.74%

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%

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ROA

ROE

ROIC

Operating and Profit Margin

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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.
Compared to 1 year ago, LNW has less shares outstanding
Compared to 5 years ago, LNW has less shares outstanding
Compared to 1 year ago, LNW has a worse debt to assets ratio.

2.2 Solvency

LNW has an Altman-Z score of 2.08. 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.
With a decent Altman-Z score value of 2.08, LNW is doing good in the industry, outperforming 60.15% of the companies in the same industry.
LNW has a debt to FCF ratio of 12.70. This is a negative value and a sign of low solvency as LNW would need 12.70 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 12.70, LNW is in line with its industry, outperforming 53.38% of the companies in the same industry.
A Debt/Equity ratio of 6.77 is on the high side and indicates that LNW has dependencies on debt financing.
LNW's Debt to Equity ratio of 6.77 is on the low side compared to the rest of the industry. LNW is outperformed by 63.91% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	6.77
Debt/FCF	12.7
Altman-Z	2.08

ROIC/WACC1.41

WACC8.38%

2.3 Liquidity

A Current Ratio of 2.13 indicates that LNW has no problem at all paying its short term obligations.
With an excellent Current ratio value of 2.13, LNW belongs to the best of the industry, outperforming 89.47% of the companies in the same industry.
LNW has a Quick Ratio of 1.85. This is a normal value and indicates that LNW is financially healthy and should not expect problems in meeting its short term obligations.
With an excellent Quick ratio value of 1.85, LNW belongs to the best of the industry, outperforming 84.21% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	2.13
Quick Ratio	1.85

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

LNW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 42.55%, which is quite impressive.
LNW shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.53% yearly.
The Revenue has been growing slightly by 1.87% in the past year.
LNW shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.95% yearly.

EPS 1Y (TTM)42.55%

EPS 3Y5.53%

EPS 5YN/A

EPS Q2Q%88.73%

Revenue 1Y (TTM)1.87%

Revenue growth 3Y13.98%

Revenue growth 5Y5.95%

Sales Q2Q%2.94%

3.2 Future

The Earnings Per Share is expected to grow by 21.44% on average over the next years. This is a very strong growth
LNW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.29% yearly.

EPS Next Y52.71%

EPS Next 2Y38.2%

EPS Next 3Y33.93%

EPS Next 5Y21.44%

Revenue Next Year6.25%

Revenue Next 2Y6.93%

Revenue Next 3Y6.52%

Revenue Next 5Y5.29%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 18.78, the valuation of LNW can be described as rather expensive.
Based on the Price/Earnings ratio, LNW is valued a bit cheaper than 69.17% of the companies in the same industry.
When comparing the Price/Earnings ratio of LNW to the average of the S&P500 Index (27.21), we can say LNW is valued slightly cheaper.
The Price/Forward Earnings ratio is 12.23, which indicates a correct valuation of LNW.
Based on the Price/Forward Earnings ratio, LNW is valued a bit cheaper than the industry average as 79.70% of the companies are valued more expensively.
LNW's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.98.

		Industry Rank	Sector Rank
PE	18.78
Fwd PE	12.23

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 63.16% of the companies listed in the same industry.
73.68% of the companies in the same industry are more expensive than LNW, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	18.61
EV/EBITDA	10.03

4.3 Compensation for Growth

LNW's 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.
LNW's earnings are expected to grow with 33.93% in the coming years. This may justify a more expensive valuation.