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. LNW may be a bit undervalued, certainly considering the very reasonable score on growth These ratings could make LNW a good candidate for value investing.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

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.
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

LNW's Return On Assets of 6.13% is fine compared to the rest of the industry. LNW outperforms 72.93% of its industry peers.
With an excellent Return On Equity value of 55.19%, LNW belongs to the best of the industry, outperforming 90.98% of the companies in the same industry.
The Return On Invested Capital of LNW (11.81%) is better than 76.69% of its industry peers.
LNW had an Average Return On Invested Capital over the past 3 years of 10.25%. This is in line with the industry average of 10.38%.
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

LNW's Profit Margin of 12.39% is amongst the best of the industry. LNW outperforms 80.45% of its industry peers.
LNW's Profit Margin has declined in the last couple of years.
LNW's Operating Margin of 25.77% is amongst the best of the industry. LNW outperforms 90.23% of its industry peers.
In the last couple of years the Operating Margin of LNW has grown nicely.
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

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so LNW is still creating some value.
LNW has less shares outstanding than it did 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.

2.2 Solvency

An Altman-Z score of 2.08 indicates that LNW is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of LNW (2.08) is better than 60.15% of its industry peers.
The Debt to FCF ratio of LNW is 12.70, which is on the high side as it means it would take LNW, 12.70 years of fcf income to pay off all of its debts.
LNW has a Debt to FCF ratio of 12.70. This is comparable to the rest of the industry: LNW outperforms 53.38% of its industry peers.
A Debt/Equity ratio of 6.77 is on the high side and indicates that LNW has dependencies on debt financing.
With a Debt to Equity ratio value of 6.77, LNW is not doing good in the industry: 63.91% of the companies in the same industry are doing better.

		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.
Looking at the Current ratio, with a value of 2.13, LNW belongs to the top of the industry, outperforming 89.47% of the companies in the same industry.
A Quick Ratio of 1.85 indicates that LNW should not have too much problems paying its short term obligations.
LNW's Quick ratio of 1.85 is amongst the best of the industry. LNW outperforms 84.21% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	2.13
Quick Ratio	1.85

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WACC

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 42.55% 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.
LNW shows a small growth in Revenue. In the last year, the Revenue has grown by 1.87%.
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

LNW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.44% yearly.
Based on estimates for the next years, LNW will show a small growth in Revenue. The Revenue will grow by 5.29% on average per year.

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 the industry average as 69.17% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.41, LNW is valued a bit cheaper.
A Price/Forward Earnings ratio of 12.23 indicates a correct valuation of LNW.
79.70% 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 25.64. LNW is valued rather cheaply when compared to this.

		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.
LNW's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. LNW is cheaper than 73.68% of the companies in the same industry.

		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.
The decent profitability rating of LNW may justify a higher PE ratio.
A more expensive valuation may be justified as LNW's earnings are expected to grow with 33.93% in the coming years.