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LIGHT & WONDER INC (LNW) Stock Fundamental Analysis

NASDAQ:LNW - Nasdaq - US80874P1093 - Common Stock

91.66  +0.46 (+0.5%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to LNW. LNW was compared to 134 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 is not valued too expensively and it also shows a decent 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.
In the past year LNW had a positive cash flow from operations.
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

LNW's Return On Assets of 5.27% is fine compared to the rest of the industry. LNW outperforms 70.23% of its industry peers.
LNW has a Return On Equity of 34.38%. This is amongst the best in the industry. LNW outperforms 87.79% of its industry peers.
The Return On Invested Capital of LNW (13.59%) is better than 83.21% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for LNW is below the industry average of 10.54%.
The 3 year average ROIC (7.15%) for LNW is below the current ROIC(13.59%), indicating increased profibility in the last year.
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

LNW has a better Profit Margin (9.33%) than 72.52% of its industry peers.
LNW has a better Operating Margin (24.07%) than 85.50% 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 70.43%, LNW belongs to the top 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

LNW has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, LNW has less shares outstanding
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

LNW has an Altman-Z score of 2.39. 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.
The Altman-Z score of LNW (2.39) is better than 67.18% 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.
LNW has a Debt to FCF ratio (12.37) which is in line with its industry peers.
A Debt/Equity ratio of 4.49 is on the high side and indicates that LNW has dependencies on debt financing.
With a Debt to Equity ratio value of 4.49, LNW is not doing good in the industry: 60.31% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 4.49
Debt/FCF 12.37
Altman-Z 2.39
ROIC/WACC1.54
WACC8.83%
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 82.44% of the companies in the same industry.
LNW has a Quick Ratio of 1.61. This is a normal value and indicates that LNW is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of LNW (1.61) is better 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

The Earnings Per Share has grown by an impressive 138.52% over the past year.
LNW shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.37%.
LNW shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -2.91% yearly.
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 Y100.18%
EPS Next 2Y75.59%
EPS Next 3Y55.88%
EPS Next 5Y32.06%
Revenue Next Year10.74%
Revenue Next 2Y8.85%
Revenue Next 3Y7.73%
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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6

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 28.47 indicates a quite expensive valuation of LNW.
The rest of the industry has a similar Price/Earnings ratio as LNW.
LNW's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.29.
LNW is valuated correctly with a Price/Forward Earnings ratio of 16.89.
74.05% of the companies in the same industry are more expensive than LNW, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of LNW to the average of the S&P500 Index (24.44), we can say LNW is valued slightly cheaper.
Industry RankSector Rank
PE 28.47
Fwd PE 16.89
LNW Price Earnings VS Forward Price EarningsLNW Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, LNW is valued a bit cheaper than 69.47% 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 69.47% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 25.86
EV/EBITDA 10.11
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 55.88% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.28
PEG (5Y)N/A
EPS Next 2Y75.59%
EPS Next 3Y55.88%

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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 (1/22/2025, 11:48:51 AM)

91.66

+0.46 (+0.5%)

Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)11-12 2024-11-12/amc
Earnings (Next)N/A N/A
Inst Owners75.6%
Inst Owner ChangeN/A
Ins Owners0.41%
Ins Owner Change1.79%
Market Cap8.09B
Analysts76
Price Target113.18 (23.48%)
Short Float %2.81%
Short Ratio4.15
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)0.39%
PT rev (3m)0.03%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-15.17%
EPS NY rev (1m)0%
EPS NY rev (3m)-13.82%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.56%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.89%
Valuation
Industry RankSector Rank
PE 28.47
Fwd PE 16.89
P/S 2.56
P/FCF 25.86
P/OCF 13.56
P/B 9.43
P/tB N/A
EV/EBITDA 10.11
EPS(TTM)3.22
EY3.51%
EPS(NY)5.43
Fwd EY5.92%
FCF(TTM)3.54
FCFY3.87%
OCF(TTM)6.76
OCFY7.38%
SpS35.81
BVpS9.72
TBVpS-31.23
PEG (NY)0.28
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 2.39
F-Score7
WACC8.83%
ROIC/WACC1.54
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 Y100.18%
EPS Next 2Y75.59%
EPS Next 3Y55.88%
EPS Next 5Y32.06%
Revenue 1Y (TTM)12.37%
Revenue growth 3Y19.54%
Revenue growth 5Y-2.91%
Sales Q2Q%11.76%
Revenue Next Year10.74%
Revenue Next 2Y8.85%
Revenue Next 3Y7.73%
Revenue Next 5Y5.42%
EBIT growth 1Y34.22%
EBIT growth 3YN/A
EBIT growth 5Y3.42%
EBIT Next Year114.52%
EBIT Next 3Y36.72%
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%