Light & Wonder, Inc.
Light & Wonder, Inc. Fundamental Analysis
Light & Wonder, Inc. (LNW) shows moderate financial fundamentals with a PE ratio of 18.24, profit margin of 13.70%, and ROE of 79.30%. The company generates $3.4B in annual revenue with moderate year-over-year growth of 3.95%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 67.6/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze LNW's fundamental strength across five key dimensions:
Efficiency Score
WeakLNW struggles to generate sufficient returns from assets.
Valuation Score
ExcellentLNW trades at attractive valuation levels.
Growth Score
WeakLNW faces weak or negative growth trends.
Financial Health Score
ExcellentLNW maintains a strong and stable balance sheet.
Profitability Score
ModerateLNW maintains healthy but balanced margins.
Key Financial Metrics
Is LNW Expensive or Cheap?
P/E Ratio
LNW trades at 18.24 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, LNW's PEG of 1.10 indicates fair valuation.
Price to Book
The market values Light & Wonder, Inc. at 33.79 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 7.07 times EBITDA. This is generally considered low.
How Well Does LNW Make Money?
Net Profit Margin
For every $100 in sales, Light & Wonder, Inc. keeps $13.70 as profit after all expenses.
Operating Margin
Core operations generate 20.61 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $79.30 in profit for every $100 of shareholder equity.
ROA
Light & Wonder, Inc. generates $7.03 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Light & Wonder, Inc. produces operating cash flow of $808.36M, showing steady but balanced cash generation.
Free Cash Flow
Light & Wonder, Inc. generates strong free cash flow of $491.73M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $5.82 in free cash annually.
FCF Yield
LNW converts 5.73% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
18.24
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.10
vs 25 benchmark
P/B Ratio
Price to book value ratio
33.79
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.54
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.33
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.60
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.79
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How LNW Stacks Against Its Sector Peers
| Metric | LNW Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 18.24 | 23.49 | Better (Cheaper) |
| ROE | 79.30% | 1160.00% | Weak |
| Net Margin | 13.70% | 672.00% | Weak |
| Debt/Equity | 0.33 | 0.73 | Strong (Low Leverage) |
| Current Ratio | 1.60 | 2.56 | Neutral |
| ROA | 7.03% | -8277.00% (disorted) | Weak |
LNW outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Light & Wonder, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
122.30%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
155.28%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
92.12%
Industry Style: Cyclical, Growth, Discretionary
High Growth