Light & Wonder

LNW.AX

Gambling, Resorts & Casinos · Consumer Cyclical

Price

A$112.42

+0.43 (+0.38%)

Market Cap

A$8.84B

Exchange

Australian Securities Exchange

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Share count falling — buybacks

−10.5% over 3y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 95.0M (2022) → 85.0M (2025)

Light & Wonder makes games and technology for casinos around the world. Its main products include physical slot machines, digital casino games, and the software systems that run them. The company also owns the SciPlay brand, which makes free-to-play social casino games for mobile phones. Casinos, both land-based and online, are its primary customers.

The company earns money in several ways: selling slot machines outright, licensing its game content to online casinos, and taking a share of revenue from its social gaming apps. Light & Wonder operates globally, with a strong presence in North America, Australia, and Europe, and competes with companies like IGT and Aristocrat. Its library of popular game titles and casino management software creates some switching costs for customers. The key growth driver is the ongoing shift toward online and mobile gambling, but the company carries significant debt from past acquisitions, which is reflected in its negative return on invested capital.

Winston Score History

Score breakdown

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Quality

Gross Margin

75.4%

Premium pricing power — 75.4% gross margin

Operating Margin

23.3%

Excellent — 23.3% operating margin

ROCE

3.4%

Weak — 3.4% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

N/A

Data not available

EPS YoY

N/A

Data not available

EPS Consistency

N/A

Data not available

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Cash Flow

Cash Conversion

304%

Turns 304% of profit into real cash

FCF Margin

12.8%

Converts sales into free cash efficiently (12.8%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

16.53

Heavy debt load (16.53)

Interest Cover

2.74x

Tight — interest eats into profit (2.7x)

Interest coverage between 1 and 3. Profits cover interest, but with little room to spare.

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Valuation

P/E Ratio (TTM)

37.7x

Pricey — P/E 37.7

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+27.0

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (37.7 → 10.7)

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Dividends

Not applicable for this business.

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