Light & Wonder Stands Out After Forecasting $2B in 2028 Earnings
Posted on: May 21, 2025, 03:41h.
Last updated on: May 21, 2025, 03:41h.
- Slot machine maker unveiled new forecast at its investor days
- Still expects $1.4 billion in 2025 adjusted EBITDA
On a rough day for the broader market and gaming stocks, Light & Wonder (NASDAQ: LNW) stood out after telling shareholders it expects to notch 2028 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2 billion.
Despite a challenging first quarter, the slot machine manufacturer reaffirmed its adjusted EBITDA forecast of $1.4 billion for this year. That forecast implies a compound annual growth rate (CAGR) of 15% since 2022 and doesn’t include potential benefits from the recently completed $850 million acquisition of the charitable gaming assets of Grover Gaming, Inc. and G2 Gaming, Inc.
Light & Wonder’s 2028 adjusted EBITDA forecast assumes the company will gain approximately 4% in market share in the North American premium slot segment with earnings per share doubling to $10.55 from $5.27 last year. Analysts view the Light & Wonder 2028 forecast as restrained, but with room to top rivals over that period.
We see 2028E targets as sufficiently achievable/conservative, with implied organic growth still nicely ahead of most peers,” wrote Stifel analyst Jeffrey Stantial in a note to clients.
The analyst added there’s improved clarity regarding Light & Wonder’s litigation with rival Aristocrat Leisure and should that draw to a close over the near-term, it could be a catalyst for the shares, which he rates “hold” with a $95 price target.
Grover Acquisition Could Be Growth Driver
Some analysts view the Grover deal as a potential growth engine for Light & Wonder, particularly in Indiana where e-pull charitable devices are recently became legal.
“It (the Grover buy) should add 10K units immediately, with a path to upgrade content in five existing markets and new units in Indiana, which begins legal operations 7/1/25,” notes Jefferies analyst David Katz. “We have added the legacy 10K units to our installed base at an estimated $37 WUD, with an incremental 1,200 units in 2026 for Indiana.”
Charitable gaming features the monetary stakes and potential payouts associated with traditional casino wagering, but it differs in that it’s not operated by a commercial or tribal operator or a government. Rather, it’s run by a charity that farms out gameplay to a company such as Grover. It can be offered in various forms, including lotteries, table games, and slot machines — an area in which Light & Wonder is one of the dominant companies.
Grover is profitable as highlighted by its $111 million in 2024 adjusted EBITDA. From 2022 through 2024, the company posted EBITDA and revenue CAGRs of 31% and 29%, respectively, according to Light & Wonder’s investor presentation.
Commentary on Australia Listing
Light & Wonder is about two years removed from listing its shares in Sydney. That’s considered a secondary listing with the Nasdaq in New York being the stock’s primary listing venue, but there’s been talk of the gaming device manufacturer potentially moving to a sole listing in Australia.
Jefferies’ Katz points out that 62% of the company’s issued share capital is attributable to the US listing with the remainder derived from Australia.
In its investor presentation, Light & Wonder points out that it’s aiming to join the ASX 100 and later, the ASX 50, which are two major gauges of Australian stocks. The company has achieved its goal of being included in the Russell 1000 Index in the US.
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