A Look at Light & Wonder’s Valuation After Improved Results and Major Share Buyback

Light & Wonder (LNW) just released its third quarter results, showing higher revenue and net income compared to the same period last year. Alongside these improved numbers, the company completed a sizable buyback, reducing outstanding shares and potentially boosting shareholder value.

See our latest analysis for Light & Wonder.

After those solid results and the completion of its buyback, Light & Wonder’s share price jumped 8.5% in a day, helping to offset some of this year’s earlier declines. While the stock is still down around 6.6% year-to-date and its one-year total shareholder return sits at -21.9%, the strong three-year and five-year total returns of 39% and 139% underscore the longer-term value some investors have enjoyed.

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With these gains and an improving financial picture, investors may be wondering whether Light & Wonder’s recent rally still leaves room for upside or if the market has already priced in all the good news.

Most Popular Narrative: 24.7% Undervalued

Light & Wonder’s most followed valuation narrative puts its fair value far above the recent closing price. This suggests that the latest rally could be just the start if the narrative’s assumptions hold up. The gap promises an intriguing story for anyone looking for more than headline numbers.

Ongoing digital transformation and increased online gaming penetration, particularly in North America where iGaming gross gaming revenue grew 25% YoY, underpin demand for Light & Wonder's content aggregation and omnichannel solutions. This boosts recurring revenues and margins as digital channels scale.

Read the complete narrative.

Curious what’s powering such a bullish outlook? The forecast relies on ambitious moves in growth markets, bolder margin targets, and a future profit multiple that is not easily justified in today’s market. Want to know which numbers these assumptions ride on? Unlock how this valuation stacks up by diving into the narrative behind the fair value.

Result: Fair Value of $105.85 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent regulatory hurdles and mounting competition in digital gaming could threaten Light & Wonder's growth and cast doubt on the current bullish outlook.

Find out about the key risks to this Light & Wonder narrative.

Build Your Own Light & Wonder Narrative

If the current story does not fit your view or you want to dive deeper on your own terms, you can craft your own perspective in just minutes. Do it your way

A great starting point for your Light & Wonder research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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