Light & Wonder stock target cut to $100 by Benchmark
Investing.com
Published May 12, 2025 10:34AM ET
On Monday, Benchmark analysts revised their price target for Light & Wonder (NASDAQ:LNW), reducing it to $100 from the previous $130, while maintaining a Buy rating for the company's shares. The decision followed Light & Wonder's first-quarter financial results for 2025, which fell short of market expectations. The company reported consolidated revenue of $774 million, compared to the anticipated $807 million, and an Adjusted EBITDA (AEBITDA) of $311 million, slightly below the consensus estimate of $313 million.
Despite the revenue miss, Light & Wonder achieved its 16th consecutive quarter of year-over-year revenue growth. The company also saw an expansion in its consolidated AEBITDA margin, which increased by 300 basis points to 40%. However, the overall top-line growth slowed to 2%, indicating a growing dependence on margin expansion and cost optimization to bolster earnings.
The company's management has reaffirmed its full-year 2025 AEBITDA target of $1.4 billion, excluding Grover's impact, which is in line with the current consensus estimate of $1.408 billion. They have also indicated that they expect growth to be more pronounced in the latter half of the year.
Analysts are closely watching Light & Wonder's strategies for accelerating revenue growth, improving yield in Gaming Operations, and enhancing the direct-to-consumer reach of its SciPlay (NASDAQ:SCPL) division. These factors are particularly important in the context of ongoing macroeconomic uncertainty and the challenges posed by tariff-related input cost pressures.
In other recent news, Light & Wonder reported first-quarter earnings that did not meet analyst expectations, with adjusted earnings per share at $0.94 compared to the anticipated $1.11. The company's revenue reached $774 million, falling short of the projected $806.04 million. Despite this, Light & Wonder achieved its 16th consecutive quarter of year-over-year consolidated revenue growth, with Gaming revenue increasing by 4% to $495 million. However, SciPlay revenue saw a decline of 2% to $202 million. In a strategic move, the company repurchased approximately 1.9 million shares of common stock for $166 million during the quarter.
The company also maintained its 2025 consolidated AEBITDA target of $1.4 billion, with a notable 11% year-over-year increase in consolidated AEBITDA to $311 million. Light & Wonder's net income remained steady at $82 million compared to the previous year. Stifel analysts raised the stock target for Light & Wonder to $95, maintaining a Hold rating, and noted robust North American replacement sales. The company is also progressing with its $850 million acquisition of Grover Gaming's charitable gaming business, expected to close in the second quarter of 2025.
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Written By: Investing.com
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