Can Light & Wonder's (LNW) Profit Gains Outpace Slower Sales Growth Over the Long Term?

• Light & Wonder, Inc. reported its second quarter 2025 results, with revenue at US$809 million, down slightly from a year ago, but net income rising to US$95 million and earnings per share increasing on both a basic and diluted basis.
• This performance indicates the company improved profitability and operational efficiency, achieving higher earnings despite flat or lower revenue in the same period last year.
• We'll examine how Light & Wonder's increased net income and earnings per share reinforce the investment narrative of strengthening market position.

Find companies with promising cash flow potential yet trading below their fair value.

Light & Wonder Investment Narrative Recap

For investors in Light & Wonder, belief in the company’s long-term potential centers on its ability to drive margin expansion and deliver consistent earnings growth, even in the face of relatively flat top-line results. The latest quarterly earnings show that stronger profitability has not been meaningfully offset by slightly lower revenue, so near-term focus remains on execution of margin drivers; however, the biggest risk continues to be integration of acquisitions like Grover Gaming, which could impact margins if expected synergies prove difficult to realize.

Among recent company announcements, the upcoming acquisition of Grover Gaming stands out as particularly relevant given Light & Wonder’s emphasis on expanding recurring revenue streams and improving net margins. While this acquisition is consistent with current catalysts, investors are likely to watch closely for any early integration updates that may affect the timing or scale of intended margin expansion.

By contrast, investors should be aware that any delays or complications linked to the Grover Gaming integration could ...

Read the full narrative on Light & Wonder (it's free!)

Light & Wonder's outlook anticipates $4.0 billion in revenue and $700.7 million in earnings by 2028. This assumes a 7.2% annual revenue growth rate and an increase in earnings of $364.7 million from the current $336.0 million.

Uncover how Light & Wonder's forecasts yield a $112.90 fair value, a 24% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members estimate Light & Wonder’s fair value between US$112.90 and US$169.16, based on 2 detailed forecasts. Opinions are split, and with acquisition integration risk still a factor, these differing analyses underscore the need to consider multiple viewpoints before making decisions.

Explore 2 other fair value estimates on Light & Wonder - why the stock might be worth as much as 86% more than the current price!

Build Your Own Light & Wonder Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Light & Wonder research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Light & Wonder's overall financial health at a glance.

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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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