LIGHT & WONDER INC (LNW) Stock Fundamental Analysis
NASDAQ:LNW - Nasdaq - US80874P1093 - Common Stock - Currency: USD
Taking everything into account, LNW scores 5 out of 10 in our fundamental rating. LNW was compared to 135 industry peers in the Hotels, Restaurants & Leisure industry. While LNW belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. LNW has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year LNW was profitable.
In the past year LNW had a positive cash flow from operations.
Of the past 5 years LNW 4 years were profitable.
Of the past 5 years LNW 4 years had a positive operating cash flow.
1.2 Ratios
LNW's Return On Assets of 6.16% is fine compared to the rest of the industry. LNW outperforms 75.56% of its industry peers.
LNW has a Return On Equity of 54.19%. This is amongst the best in the industry. LNW outperforms 94.81% of its industry peers.
With an excellent Return On Invested Capital value of 13.90%, LNW belongs to the best of the industry, outperforming 81.48% of the companies in the same industry.
LNW had an Average Return On Invested Capital over the past 3 years of 10.25%. This is below the industry average of 14.13%.
The last Return On Invested Capital (13.90%) for LNW is above the 3 year average (10.25%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.16% | ||
| ROE | 54.19% | ||
| ROIC | 13.9% |
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 has a Profit Margin of 10.48%. This is in the better half of the industry: LNW outperforms 75.56% of its industry peers.
LNW's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 24.33%, LNW belongs to the top of the industry, outperforming 87.41% of the companies in the same industry.
LNW's Operating Margin has improved in the last couple of years.
LNW has a better Gross Margin (71.18%) than 85.93% of its industry peers.
LNW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.33% | ||
| PM (TTM) | 10.48% | ||
| GM | 71.18% |
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%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), LNW is creating some value.
The number of shares outstanding for LNW has been reduced compared to 1 year ago.
Compared to 5 years ago, LNW has less shares outstanding
LNW has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.30 indicates that LNW is not a great score, but indicates only limited risk for bankruptcy at the moment.
LNW's Altman-Z score of 2.30 is fine compared to the rest of the industry. LNW outperforms 65.93% of its industry peers.
LNW has a debt to FCF ratio of 10.94. This is a negative value and a sign of low solvency as LNW would need 10.94 years to pay back of all of its debts.
LNW has a Debt to FCF ratio (10.94) which is comparable to the rest of the industry.
A Debt/Equity ratio of 6.26 is on the high side and indicates that LNW has dependencies on debt financing.
LNW has a worse Debt to Equity ratio (6.26) than 62.96% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.26 | ||
| Debt/FCF | 10.94 | ||
| Altman-Z | 2.3 |
ROIC/WACC1.49
WACC9.35%
2.3 Liquidity
LNW has a Current Ratio of 1.57. This is a normal value and indicates that LNW is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Current ratio value of 1.57, LNW is doing good in the industry, outperforming 77.78% of the companies in the same industry.
LNW has a Quick Ratio of 1.35. This is a normal value and indicates that LNW is financially healthy and should not expect problems in meeting its short term obligations.
LNW has a Quick ratio of 1.35. This is in the better half of the industry: LNW outperforms 73.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.57 | ||
| Quick Ratio | 1.35 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 55.60% over the past year.
LNW shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.53% yearly.
LNW shows a small growth in Revenue. In the last year, the Revenue has grown by 7.26%.
The Revenue has been growing slightly by 5.95% on average over the past years.
EPS 1Y (TTM)55.6%
EPS 3Y5.53%
EPS 5YN/A
EPS Q2Q%6.82%
Revenue 1Y (TTM)7.26%
Revenue growth 3Y13.98%
Revenue growth 5Y5.95%
Sales Q2Q%2.38%
3.2 Future
The Earnings Per Share is expected to grow by 19.41% on average over the next years. This is quite good.
Based on estimates for the next years, LNW will show a small growth in Revenue. The Revenue will grow by 4.85% on average per year.
EPS Next Y53.4%
EPS Next 2Y36.68%
EPS Next 3Y33.38%
EPS Next 5Y19.41%
Revenue Next Year6.87%
Revenue Next 2Y6.74%
Revenue Next 3Y6.57%
Revenue Next 5Y4.85%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 22.94, LNW is valued on the expensive side.
LNW's Price/Earnings ratio is a bit cheaper when compared to the industry. LNW is cheaper than 64.44% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.82. LNW is around the same levels.
Based on the Price/Forward Earnings ratio of 12.48, the valuation of LNW can be described as correct.
Based on the Price/Forward Earnings ratio, LNW is valued cheaply inside the industry as 81.48% of the companies are valued more expensively.
LNW's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.94 | ||
| Fwd PE | 12.48 |
4.2 Price Multiples
LNW's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. LNW is cheaper than 68.15% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, LNW is valued a bit cheaper than the industry average as 71.85% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.35 | ||
| EV/EBITDA | 9.38 |
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.
A more expensive valuation may be justified as LNW's earnings are expected to grow with 33.38% in the coming years.
PEG (NY)0.43
PEG (5Y)N/A
EPS Next 2Y36.68%
EPS Next 3Y33.38%
5. Dividend
5.1 Amount
LNW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
86.01
+4 (+4.88%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners68.26%
Inst Owner ChangeN/A
Ins Owners0.42%
Ins Owner Change3.8%
Market Cap7.26B
Analysts76.84
Price Target113.64 (32.12%)
Short Float %4.06%
Short Ratio3.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.76%
Min EPS beat(2)-18.02%
Max EPS beat(2)25.54%
EPS beat(4)1
Avg EPS beat(4)-10.28%
Min EPS beat(4)-35.43%
Max EPS beat(4)25.54%
EPS beat(8)4
Avg EPS beat(8)-0.85%
EPS beat(12)6
Avg EPS beat(12)4749.38%
EPS beat(16)10
Avg EPS beat(16)3680.74%
Revenue beat(2)0
Avg Revenue beat(2)-3.03%
Min Revenue beat(2)-4.96%
Max Revenue beat(2)-1.11%
Revenue beat(4)1
Avg Revenue beat(4)-1.5%
Min Revenue beat(4)-4.96%
Max Revenue beat(4)1.55%
Revenue beat(8)5
Avg Revenue beat(8)0.96%
Revenue beat(12)9
Avg Revenue beat(12)1.63%
Revenue beat(16)11
Avg Revenue beat(16)-2.31%
PT rev (1m)-2.64%
PT rev (3m)0.97%
EPS NQ rev (1m)-1.03%
EPS NQ rev (3m)-1.46%
EPS NY rev (1m)-1.65%
EPS NY rev (3m)3.39%
Revenue NQ rev (1m)-1.69%
Revenue NQ rev (3m)-1.58%
Revenue NY rev (1m)-0.98%
Revenue NY rev (3m)-0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.94 | ||
| Fwd PE | 12.48 | ||
| P/S | 2.27 | ||
| P/FCF | 20.35 | ||
| P/OCF | 11.25 | ||
| P/B | 11.72 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.38 |
EPS(TTM)3.75
EY4.36%
EPS(NY)6.89
Fwd EY8.02%
FCF(TTM)4.23
FCFY4.91%
OCF(TTM)7.65
OCFY8.89%
SpS37.95
BVpS7.34
TBVpS-34.26
PEG (NY)0.43
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.16% | ||
| ROE | 54.19% | ||
| ROCE | 16.59% | ||
| ROIC | 13.9% | ||
| ROICexc | 14.31% | ||
| ROICexgc | 62.02% | ||
| OM | 24.33% | ||
| PM (TTM) | 10.48% | ||
| GM | 71.18% | ||
| FCFM | 11.14% |
ROA(3y)23.43%
ROA(5y)13.57%
ROE(3y)148.45%
ROE(5y)N/A
ROIC(3y)10.25%
ROIC(5y)N/A
ROICexc(3y)11.23%
ROICexc(5y)N/A
ROICexgc(3y)64.46%
ROICexgc(5y)N/A
ROCE(3y)12.23%
ROCE(5y)N/A
ROICexcg growth 3Y87.73%
ROICexcg growth 5Y32.71%
ROICexc growth 3Y57.06%
ROICexc growth 5Y29.38%
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%
F-Score7
Asset Turnover0.59
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.26 | ||
| Debt/FCF | 10.94 | ||
| Debt/EBITDA | 3.4 | ||
| Cap/Depr | 80.06% | ||
| Cap/Sales | 9.01% | ||
| Interest Coverage | 2.82 | ||
| Cash Conversion | 56.62% | ||
| Profit Quality | 106.25% | ||
| Current Ratio | 1.57 | ||
| Quick Ratio | 1.35 | ||
| Altman-Z | 2.3 |
F-Score7
WACC9.35%
ROIC/WACC1.49
Cap/Depr(3y)65.3%
Cap/Depr(5y)54.63%
Cap/Sales(3y)8.72%
Cap/Sales(5y)9.06%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)55.6%
EPS 3Y5.53%
EPS 5YN/A
EPS Q2Q%6.82%
EPS Next Y53.4%
EPS Next 2Y36.68%
EPS Next 3Y33.38%
EPS Next 5Y19.41%
Revenue 1Y (TTM)7.26%
Revenue growth 3Y13.98%
Revenue growth 5Y5.95%
Sales Q2Q%2.38%
Revenue Next Year6.87%
Revenue Next 2Y6.74%
Revenue Next 3Y6.57%
Revenue Next 5Y4.85%
EBIT growth 1Y17.29%
EBIT growth 3Y40.12%
EBIT growth 5Y19.32%
EBIT Next Year90.73%
EBIT Next 3Y30.98%
EBIT Next 5Y17.78%
FCF growth 1Y169.19%
FCF growth 3Y-13.04%
FCF growth 5Y5.31%
OCF growth 1Y322.76%
OCF growth 3Y-2.65%
OCF growth 5Y2.97%