Light & Wonder (NasdaqGS:LNW) - Share price, News & Analysis

Q: What is the Fair Price of LNW when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

LNW ($48.96) is trading above our estimate of [[fair value]] ($42.46)

LNW fundamental analysis
Snowflake Score
Valuation	1/6
Future Growth	3/6
Past Performance	2/6
Financial Health	0/6
Dividends	0/6

LNW Stock Overview

Light & Wonder, Inc. develops technology-based products and services, and related content for the gaming, lottery, social and digital gaming industries in the United States and internationally.

Rewards

Earnings are forecast to grow 39.45% per year

Became profitable this year

Risk Analysis

Interest payments are not well covered by earnings

Negative shareholders equity

Large one-off items impacting financial results

Light & Wonder Competitors

International Game Technology

NYSE:IGT

US$4.1b

Red Rock Resorts

NasdaqGS:RRR

US$3.7b

DraftKings

NasdaqGS:DKNG

US$5.3b

Boyd Gaming

NYSE:BYD

US$5.7b

Price History & Performance

Summary of all time highs, changes and price drops for Light & Wonder
Historical stock prices
Current Share Price	US$48.96
52 Week High	US$90.20
52 Week Low	US$45.22
Beta	1.8
1 Month Change	-6.97%
3 Month Change	-19.17%
1 Year Change	-36.97%
3 Year Change	146.65%
5 Year Change	92.00%
Change since IPO	1,099.02%

Recent News & Updates

May 24

What Does Light & Wonder, Inc.'s (NASDAQ:LNW) Share Price Indicate?

Light & Wonder, Inc. ( NASDAQ:LNW ), might not be a large cap stock, but it received a lot of attention from a...

Shareholder Returns

	LNW	US Hospitality	US Market
7D	2.1%	4.0%	6.3%
1Y	-37.0%	-29.2%	-18.8%

Return vs Industry: LNW underperformed the US Hospitality industry which returned -29.2% over the past year.

Return vs Market: LNW underperformed the US Market which returned -18.8% over the past year.

Price Volatility

Is LNW's price volatile compared to industry and market?
LNW volatility
LNW Average Weekly Movement	8.9%
Hospitality Industry Average Movement	9.2%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	3.2%

Stable Share Price: LNW is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: LNW's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1984	5,600	Barry Cottle	https://www.scientificgames.com

Light & Wonder, Inc. develops technology-based products and services, and related content for the gaming, lottery, social and digital gaming industries in the United States and internationally. The company’s Gaming segment sells new and used gaming machines, electronic table systems, video lottery terminals, conversion game kits, and spare parts; table products, including shufflers; and perpetual licenses to proprietary table games. It also supplies game content, gaming machines; provides table game products and services to licensed gaming entities; and installs and supports casino management systems, such as ongoing hardware and software maintenance and upgrade services of customer casino management systems.

Light & Wonder Fundamentals Summary

How do Light & Wonder's earnings and revenue compare to its market cap?
LNW fundamental statistics
Market Cap	US$4.76b
Earnings (TTM)	US$30.00m
Revenue (TTM)	US$2.27b

156.1x

P/E Ratio

2.1x

P/S Ratio

Is LNW overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
LNW income statement (TTM)
Revenue	US$2.27b
Cost of Revenue	US$642.00m
Gross Profit	US$1.63b
Other Expenses	US$1.60b
Earnings	US$30.00m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.31
Gross Margin	71.74%
Net Profit Margin	1.32%
Debt/Equity Ratio	-413.3%

How did LNW perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is LNW undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LNW?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for LNW. This is calculated by dividing LNW's market cap by their current preferred multiple.
What is LNW's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$4.76b

LNW key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	5.9x
Enterprise Value/EBITDA	20.2x
PEG Ratio	4x

Price to Sales Ratio vs Peers

How does LNW's PS Ratio compare to its peers?

LNW PS Ratio vs Peers

The above table shows the PS ratio for LNW vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	1.9x
IGT International Game Technology	1x	3.7%	US$4.1b
RRR Red Rock Resorts	1.3x	4.6%	US$3.7b
DKNG DraftKings	3.8x	25.0%	US$5.3b
BYD Boyd Gaming	1.6x	2.4%	US$5.7b
LNW Light & Wonder	2.1x	6.5%	US$4.8b

Forward PS

Price-To-Sales vs Peers: LNW is expensive based on its Price-To-Sales Ratio (2.1x) compared to the peer average (1.9x).

Price to Earnings Ratio vs Industry

How does LNW's PE Ratio compare vs other companies in the US Hospitality Industry?

Price-To-Sales vs Industry: LNW is expensive based on its Price-To-Sales Ratio (2.1x) compared to the US Hospitality industry average (1.7x)

Price to Sales Ratio vs Fair Ratio

What is LNW's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LNW PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	2.1x
Fair PS Ratio	3.1x

Price-To-Sales vs Fair Ratio: LNW is good value based on its Price-To-Sales Ratio (2.1x) compared to the estimated Fair Price-To-Sales Ratio (3.1x).

Share Price vs Fair Value

What is the Fair Price of LNW when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LNW ($48.96) is trading above our estimate of fair value ($42.46)

Significantly Below Fair Value: LNW is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: LNW is poor value based on its PEG Ratio (4x)

Discover undervalued companies

Future Growth

How is Light & Wonder forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

39.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: LNW's forecast earnings growth (39.4% per year) is above the savings rate (1.9%).

Earnings vs Market: LNW's earnings (39.4% per year) are forecast to grow faster than the US market (13.8% per year).

High Growth Earnings: LNW's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: LNW's revenue (6.5% per year) is forecast to grow slower than the US market (8.3% per year).

High Growth Revenue: LNW's revenue (6.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if LNW's Return on Equity is forecast to be high in 3 years time

Discover growth companies

Past Performance

How has Light & Wonder performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

5.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LNW has a large one-off loss of $159.0M impacting its March 31 2022 financial results.

Growing Profit Margin: LNW became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: LNW has become profitable over the past 5 years, growing earnings by 5.8% per year.

Accelerating Growth: LNW has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: LNW has become profitable in the last year, making it difficult to compare its past year earnings growth to the Hospitality industry (119.6%).

Return on Equity

High ROE: LNW's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.

Discover strong past performing companies

Financial Health

How is Light & Wonder's financial position?

Financial Health Score

0/6

Financial Health Score 0/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: LNW has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: LNW has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.

Debt to Equity History and Analysis

Debt Level: LNW has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: LNW's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: LNW's debt is not well covered by operating cash flow (7.4%).

Interest Coverage: LNW's interest payments on its debt are not well covered by EBIT (0.7x coverage).

Balance Sheet

Discover healthy companies

Dividend

What is Light & Wonder current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

0.063%

Forecast Dividend Yield

Dividend Yield vs Market

Notable Dividend: Unable to evaluate LNW's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate LNW's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if LNW's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if LNW's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as LNW has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure

CEO

Barry Cottle (60 yo)

4yrs

Tenure

US$13,485,500

Compensation

Mr. Barry L. Cottle has been the Chief Executive Officer, President and Director of Light & Wonder, Inc. (formerly known as Scientific Games Corporation) since June 1, 2018. Mr. Cottle has been the Executi...

CEO Compensation Analysis

Compensation vs Market: Barry's total compensation ($USD13.49M) is above average for companies of similar size in the US market ($USD6.87M).

Compensation vs Earnings: Barry's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: LNW's management team is considered experienced (2.3 years average tenure).

Board Members

Experienced Board: LNW's board of directors are not considered experienced ( 1.8 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/28 00:00
End of Day Share Price	2022/06/28 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31