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Fund Manager Summary on Light & Wonder Inc CHESS (ASX:LNW)
In January 2026, Totus Capital commented that Light & Wonder Inc CHESS (ASX:LNW) had settled its litigation with Aristocrat, they retained their full position as the fund’s largest weight and see significant valuation upside versus peers as the company continues to execute its growth strategy. Across fund manager commentary the consensus is that LNW is a cash‑generative gaming group with solid operating momentum—including iGaming growth and recurring revenues making up roughly 70% of group sales and a large share of profit—while near‑term volatility has been driven by the Aristocrat legal overhang, the transition to a sole ASX listing and associated forced US passive selling, and some softness in land‑based equipment revenues; managers point to actionable opportunities from sustained buy‑backs, the Grover charitable‑gaming acquisition, potential ASX50 inclusion and an attractive valuation (commonly cited mid‑teens to low‑teens multiples and ~20% EPS growth expectations over the next few years), but flag risks that require monitoring such as further legal developments, quarterly revenue momentum, liquidity and index flow dynamics, and the pace of integration and margin realisation, meaning a multi‑year investment horizon and tracking of litigation outcomes, buy‑back execution and game pipeline delivery are the key strategic considerations for investors.
Commentary From The Managers
There are 64 insights from 23 fund managers regarding their investment in Light & Wonder Inc CHESS (ASX:LNW) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Totus Capital
31 Jan 2026
$167.41
Summary
- Totus Capital believes Light & Wonder is meaningfully de‑risked and continues to hold because the company has settled its litigation with Aristocrat, removing a major overhang and unlocking a key catalyst.
- Settlement with Aristocrat removes the primary legal overhang that had been constraining sentiment and valuation.
- Position unchanged: we have not sold any of our position and LNW remains our largest weight.
- Valuation upside: we see significant upside versus its direct competitor as the company continues to execute on its growth strategy.
- Execution focus: ongoing delivery on product and market initiatives supports conviction in future earnings and market share expansion.
SG Hiscock & Company
31 Dec 2025
$157.57
Summary
- SG Hiscock & Company believes Light & Wonder (ASX: LNW) is well positioned after a strong third quarter business and profit update and easing of long‑standing IP concerns, and continues to hold because the franchise is gaining share and delivering very sound profit growth supported by sustained investment in people and R&D.
- November performance: LNW was a key contributor to fund returns in November, driven by the Q3 update and reduced IP overhang.
- Franchise momentum: From our vantage the LNW franchise continues to gain market share across formats following its multi‑year business transformation.
- Profit growth: The business is delivering very sound profit growth, reflecting the benefits of prior investments.
- Investment payback: Dollars invested in people and R&D since the transformation began around six years ago are now driving results.
- Product innovation: New products and innovation continue to win market share across all formats.
- Risk reduction: Easing concerns around the long‑standing intellectual property challenge has materially improved the outlook.
Paradice Investment Management
31 Dec 2025
$157.57
Summary
- Paradice Investment Management believes Light & Wonder is attractively positioned and initiated a position because of strong profit performance, an attractive valuation, the move to a sole ASX listing and increasing comfort around the legal case with competitor Aristocrat.
- Position: Overweight — Light & Wonder was our biggest contributor over the quarter as the share price rebounded following the primary listing change to the ASX.
- Index / re-domicile: NASDAQ delisting has occurred; while some unnatural holders of the Australian-listed stock may remain, much of the transition impact appears to have been resolved and the stock was upweighted in the top 100 at the 15 December implementation date.
- Earnings momentum: Q3 beat consensus largely driven by margin improvement (revenue growth remains modest, ~+2.9%); margin realisation at Q3 levels may not be sustainable, but the company reiterated FY25 guidance and the stronger Q3 reduces the Q4 delivery burden.
- Timing of growth drivers: Some expected Q4 catalysts have slipped into FY26 (eg, Philippines opening ~500 units and Indiana Grover rollout) — viewed as timing shifts rather than structural setbacks, preserving multiple future growth drivers for the business.
- IP litigation: Litigation with Aristocrat is ongoing; Paradice is hopeful for a resolution in early 2026 and comfort on this front has supported the investment decision.
- Valuation: On consensus numbers the stock trades at ~15x FY25E P/E (Bloomberg consensus as at 10 January) and ~9x FY28E P/E versus company guidance; given expected strong earnings growth over the next three years, the share price remains viewed as very attractive.
- Conviction: Despite a significant recent rally, Paradice believes the stock still has upside as the three main uncertainties are progressively resolved and earnings momentum re-accelerates.
QVG Capital
30 Nov 2025
$152.84
Summary
- QVG Capital notes that Light & Wonder’s recent share price slump was short-lived, marking it as one of their best performers in November.
- The prior share price weakness was attributed to fundamental factors like modest earnings growth and litigation overhangs from Aristocrat.
- Technical factors included the NASDAQ exit, which forced passive fund selling.
- With the negative technical catalyst now resolved and a significant buy-back in progress, LNW has shown recovery.
- QVG Capital believes LNW benefits from a highly aligned board and management with best-in-class capital allocation.
- The strengthening game pipeline further supports their outlook.
- The Grover acquisition enhances the group’s reach in charitable gaming.
- There remains a valuation gap to Aristocrat that is still wider than the Vegas Strip.
Endeavor Asset Management
30 Nov 2025
$152.84
Summary
- Light & Wonder Inc. experienced a standout performance in November with a +40% share price movement.
- The rebound followed a period of weakness influenced by overly negative expectations before the September quarter.
- Recent results indicate that full year guidance remains realistic and is ahead of the necessary pace.
- The primary listing shift from the US to Australia led to passive selling and some active shorting.
- That selling pressure has subsided, enhancing the potential for price support as passive buying resumes.
- Endeavor Asset Management anticipates Light & Wonder as a likely entrant into the ASX 50 by 2026.
Ellerston Capital
30 Nov 2025
$152.84
Summary
- Ellerston Capital views Light & Wonder as a well-managed leader in the global gaming industry, with operations in three core segments: Gaming, SciPlay, and iGaming.
- In 2023, Light & Wonder launched a secondary listing on the ASX and transitioned to a sole primary listing on the ASX, effective 14 November.
- Shares experienced weakness due to index-related selling and ongoing litigation concerns with rival Aristocrat.
- A strong 3Q25 earnings report revealed NPATA of $153m, exceeding consensus by 13%, signaling a turnaround.
- Following the earnings report, Light & Wonder announced an extension of its Share Repurchase Program to include buy-backs of CDIs on the ASX, commencing 7 November 2025.
- This buy-back was positively received by investors, particularly given the valuation discount compared to Aristocrat.
Ausbil Investment Management
30 Nov 2025
$152.84
Summary
- Light & Wonder (LNW) increased +39.8% over the course of the month.
- Better-than-expected 3Q25 result contributed significantly to the increase.
- Increased certainty around the primary Australian listing from the NASDAQ was a key driver.
- Market focus has shifted back to fundamentals as major concerns have lessened.
- The company is projected to deliver approximately 20% EPS growth over the next three years.
- Currently trading at an undemanding multiple relative to peers and the broader market.
- Ausbil Investment Management continues to hold because they believe this is only the beginning of the journey for LNW.
Perpetual Asset Management
30 Nov 2025
$152.84
Summary
- Perpetual Asset Management reports a strong rebound in Light & Wonder's stock, up 39.8% in November after a weak October.
- 3Q earnings update exceeded market expectations, particularly in the US gaming operations division.
- Performance in the gaming sector highlighted by strong fee per day and unit growth well-received by the market.
- A robust gaming operations business is seen as a powerful margin driver and enhances shareholder value, as evidenced by peer Aristocrat.
- Positive outlook for the gaming operations division driven by strong new game performance.
- Company fundamentals remain strong, backed by disciplined capital management and a solid balance sheet.
- Growth is also seen in the high-margin iGaming division and the integrated Grover Gaming platform.
- Transition to a sole ASX listing completed, which should enhance passive flows and attract local investors.
- While uncertainty exists with the Aristocrat court case, valuation remains attractive compared to earnings growth potential.
SG Hiscock & Company
30 Nov 2025
$152.84
Summary
- SG Hiscock & Company notes a significant rebound in Light and Wonder (LNW +39.8%) after prior underperformance in October.
- The company reported strong operating momentum, especially in its North American Gaming operations.
- Recurring revenues now account for approximately 70% of group revenue and over 80% of profit.
- The acquisition of Grover/charitable gaming is exceeding initial expectations, contributing to earnings momentum.
- Inclusion in the ASX50 following the decision to list solely on the ASX has been a positive catalyst.
- Unwinding of positioning to capitalize on the shift in register has also added to the stock's appeal.
L1 Capital
30 Nov 2025
$152.84
Summary
- L1 Capital updates their investment thesis on Light & Wonder (CHESS)
- Share recovery: Shares recovered ~40% after strong Q3 results and the company re‑iterated full‑year earnings guidance.
- Listing change: Completion of NASDAQ delisting and shift to a sole ASX listing removed significant forced selling from U.S. passive equity holders.
- Earnings outlook: L1 Capital believes Light & Wonder is well placed to deliver solid medium‑term earnings growth, driven by strong land‑based game performance.
- Why L1 Capital continues to hold: Improved operational results, a clearer shareholder base and reduced forced selling support the current investment case.
- Risks and caveats: Execution, market conditions and regulatory or macro risks could alter the outlook.
- Not financial advice: This update reflects L1 Capital’s view and is not financial advice.
Totus Capital
24 Nov 2025
$145.00
Summary
- Totus Capital is optimistic about a re-rating for Light & Wonder as it prepares to move its listing to the ASX.
- This shift is anticipated to trigger a wave of passive buying.
- Despite a 16% slump in shares due to a legal ruling, Totus Capital views the market's pessimism as irrational.
- Light & Wonder constitutes approximately 10% of the Totus portfolio.
- Portfolio manager Ben McGarry believes the current market focus is overly fixated on short-term noise.
- Totus is raising $200 million to invest in Light & Wonder via a single stock fund.
- The move to the ASX positions Light & Wonder on the cusp of joining the S&P/ASX 50 Index, broadening its shareholder base.
- Local fund managers note a liquidity vacuum until the stock is listed in Australia.
- Concerns regarding management trustworthiness and expected weak Q3 results have been alleviated by a recent trading update.
- The latest update was described as "better than feared", with management reaffirming guidance for 2025.
- Light & Wonder trades on just 13 times trailing free cash flow, while the potential for earnings per share to double by 2028 is significant.
- Despite recent performance drag, Totus Capital remains confident that patience will pay off.
- The Totus Alpha Long Short fund fell 1.8% in October but has outperformed the market since inception.
- Light and Wonder shares have recently climbed 4% to about $145 each.
L1 Capital
20 Nov 2025
$140.90
Summary
- L1 Capital continues to hold its investment in Light & Wonder Inc. due to potential recovery in share performance.
- Shares faced significant pressure, dropping from $150 in July to $0.10 by October.
- Key issues impacting the company include:
- Erratic revenues influenced by tariffs and changes in consumer discretionary spending.
- High-profile litigation disputes, particularly with Aristocrat.
- Massive index selling after moving from NASDAQ to a sole listing on ASX, affecting market cap.
- Looking forward, improvement is expected over the next 12 to 18 months as:
- The index rebalance is complete, with upcoming index buying on ASX.
- More consistent revenue trends are anticipated.
- Litigation risks may become clearer by 2026, alleviating stock overhang.
- Current trading at 14 times FY26 PE with potential for 20% earnings growth in FY27 and further growth thereafter.
- L1 Capital remains optimistic about the long-term outlook for Light & Wonder Inc.
QVG Capital
5 Nov 2025
$115.38
Summary
- QVG Capital identifies Light and Wonder as a detractor in October.
- Anticipation of a weak 3rd and 4th quarter results, consistent with disappointing 1st and 2nd quarters.
- Investment decisions depend on time frame considerations.
- Negative catalysts include earnings reports, a potential Nasdaq de-listing, and litigation news flow.
- Investors looking multiple years ahead may find a compelling valuation.
- Light and Wonder is recognized as a leader in its industry, cash generative, and growing.
- Emphasis on shareholder-friendly capital allocation.
QVG Capital
31 Oct 2025
$109.47
Summary
- Light and Wonder was a detractor for QVG Capital in October.
- QVG Capital anticipates weak upcoming 3rd and 4th quarter results to align with disappointing earlier quarters.
- The decision on the stock depends on investment time frame.
- Negative catalysts include upcoming earnings, a Nasdaq de-listing, and litigation news.
- Investors looking at a longer horizon may find a compelling valuation for a leading, cash-generative company.
- Recent share price decline is due to fundamental issues (modest earnings growth, litigation) and technical factors (NASDAQ exit causing passive fund selling).
- Management and board are highly aligned with best-in-class capital allocation.
- The Grover acquisition enhances reach in charitable gaming.
- The valuation gap to Aristocrat has widened significantly.
Endeavor Asset Management
31 Oct 2025
$109.47
Summary
- Endeavor Asset Management notes a 15% decrease in Light & Wonder's share price during the month.
- The decline is attributed to forced selling from investors due to the upcoming US delisting in November.
- Once fully relisted in Australia, the stock is expected to trade more efficiently.
- Endeavor anticipates that Light & Wonder will be compared to its closest competitor, Aristocrat (ALL).
- Aristocrat trades at roughly twice the P/E multiple while exhibiting similar EBITDA growth and margins.
- Endeavor Asset Management continues to hold its position in Light & Wonder based on these expectations.
L1 Capital
31 Oct 2025
$109.47
Summary
- Light & Wonder (Long -16%) shares have declined due to several factors.
- Softer U.S. gaming revenues have affected the overall industry.
- Change in listing locations will see the company de-list from NASDAQ.
- Overhang from litigation dispute with Aristocrat Leisure impacts sentiment.
- Despite a tougher consumer backdrop, gaming revenues remain modestly positive across the industry.
- Light & Wonder is well placed to continue gaining market share.
- The transition to a sole primary ASX listing may cause short-term volatility.
- Forced selling from U.S. passive equity holders is expected during this transition.
- L1 Capital believes the company is well positioned for solid earnings growth over the medium term.
- Growth is expected to be driven by strong land-based game performance.
Perpetual Asset Management
31 Oct 2025
$109.47
Summary
- Light & Wonder declined 15.57% in October due to softened investor sentiment following corporate updates.
- The decision to delist from the Nasdaq and maintain a sole primary listing on the ASX reflects a streamlining of its global corporate structure.
- Some investors perceive the delisting as a short-term headwind impacting liquidity and U.S. market visibility.
- Mixed investor appetite leading into the Q3 2025 earnings report has prompted increased caution and profit-taking.
- Despite recent developments, the company’s fundamentals remain strong with disciplined capital management and a solid balance sheet.
- Continued growth in the high-margin iGaming division supports the company's long-term potential.
- The ASX consolidation simplifies the investor base and supports long-term value creation.
- Legal developments with Aristocrat have extended uncertainty, but the shift to a single listing is viewed positively.
- Perpetual Asset Management continues to hold because they see short-term trading volatility as irrelevant to the long-term potential.
- The current valuation of 12x PE is roughly half that of its nearest competitor, suggesting the market has priced in potential negatives.
- Operationally, the company is well placed to deliver strong earnings growth in the coming years.
Ausbil Investment Management
30 Sept 2025
$129.64
Summary
- Light & Wonder (LNW) experienced a decline of -12.1% in September.
- The FY25 results were impacted by a shift to a sole listing on the ASX.
- Market weakness stems from uncertainty regarding potential passive selling by US investors post-Nasdaq delisting.
- Ausbil views this as short-term noise.
- Long-term fundamentals remain compelling.
- LNW is projected to deliver average EPS growth of around +20% over the next two years.
- The stock trades at an attractive multiple, both absolutely and relative to peers.
- Ausbil continues to hold LNW based on these fundamentals.
Endeavor Asset Management
30 Sept 2025
$129.64
Summary
- Light & Wonder (LNW) experienced subdued performance in September.
- Investors are currently adopting a wait and see approach due to ongoing legal action involving Aristocrat Leisure.
- Endeavor Asset Management maintains its investment thesis, projecting mid to high single digit revenue growth over the next three years.
- Expectations for high teens EPS growth during the same period.
- Shares are trading at an undemanding ~12x FY26 P/E, suggesting potential value.
Paradice Investment Management
30 Sept 2025
$129.64
Summary
- Paradice Investment Management notes that Light & Wonder has recently detracted from performance due to market reactions to its primary listing change and ongoing litigation.
- The company’s August quarterly update indicated solid operational execution but revealed softer momentum in its Gaming segment, with emerging customer caution regarding discretionary capital budgets.
- Despite reaffirming FY25 guidance with a robust US$1.4bn EBITDA target, investor focus has shifted towards the near-term revenue slowdown and ongoing litigation risks affecting sentiment.
- The primary listing change to the ASX and delisting from Nasdaq is anticipated to be finalized by the end of November.
- Paradice Investment Management is concentrating on the medium-term growth trajectory, with FY28 AEBITDA guidance suggesting a 12% CAGR.
- This growth is supported by a healthy R&D pipeline and an attractive current valuation.
QVG Capital
30 Sept 2025
$129.64
Summary
- QVG Capital continues to monitor the performance of Light & Wonder Inc. closely.
- During the period, Light & Wonder was identified as a detractor from overall performance.
- No specific commentary was provided regarding the reasons for its underperformance.
- QVG Capital remains committed to evaluating the long-term potential of Light & Wonder.
- The focus remains on understanding market dynamics that could impact future performance.
Totus Capital
31 Aug 2025
$137.66
Summary
- Totus Capital continues to hold Light & Wonder Inc. (LNW) despite recent performance challenges.
- The stock has faced negative sentiment due to a legal dispute with competitor Aristocrat (ALL).
- Despite these challenges, LNW shows solid operating momentum and an attractive valuation.
- Recent material insider buying by directors indicates confidence in the company's future.
- Totus Capital used the share price weakness to double their position in LNW.
Perpetual Asset Management
31 Aug 2025
$137.66
Summary
- Light & Wonder detracted from performance in August (–6.8%) as market sentiment tightened.
- Despite this, the company showed solid underlying execution.
- Reported a slight 1% drop in Q2 revenue, affected by weaker performance in Gaming equipment and SciPlay segments.
- Notably, iGaming grew 9%, benefiting from margin expansion and disciplined cost control.
- Perpetual Asset Management continues to hold due to the company's reaffirmation of its 2025 financial outlook.
- Transitioning to a sole primary listing on the ASX and ongoing share buy-backs are positive developments.
- Integration of the Grover Gaming acquisition is also a focus for the company.
- Concerns remain regarding ongoing litigation with Aristocrat, including trade-secret misappropriation claims.
- This legal uncertainty, combined with softer near-term top-line dynamics, overshadows otherwise resilient financials.
Ausbil Investment Management
31 Aug 2025
$137.66
Summary
- Light & Wonder (LNW) experienced a -6.7% decline in August.
- The FY25 results were impacted by the decision to transition to a sole primary listing on the ASX.
- Share price weakness was intensified by uncertainty regarding potential passive selling and diminished interest from US investors in holding shares on the Nasdaq.
- Ausbil continues to hold because they expect the market to eventually return to fundamentals, which they find compelling.
- LNW is projected to deliver an average EPS growth of +20% over the next two years.
- The stock is considered to be trading at a very attractive multiple, both in absolute terms and relative to its competitors.
Paradice Investment Management
30 June 2025
$147.42
Summary
- Paradice Investment Management maintains an overweight position in Light & Wonder (LNW).
- Key highlight from the Investor Day on May 21st includes the introduction of FY28 Adjusted EBITDA guidance of US$2bn, indicating approximately 43% growth from the FY25 guidance of US$1.4b.
- The market is currently not rewarding LNW for meeting its guidance, nor for anticipated future earnings growth.
- A significant discount is applied compared to direct peer Aristocrat Leisure (ALL), primarily due to perceived litigation risk.
- Paradice believes this perceived risk is overdone, presenting significant value at current price levels from a medium-term perspective.
- Operationally, LNW is performing strongly, particularly in Gaming Ops and iGaming, including the recent acquisition of Grover.
- SciPlay may benefit from a recent US court decision that prohibits Apple from banning access to direct-to-consumer platforms.
- There is confidence in LNW’s strong R&D pipeline, which is expected to drive further market share gains in the medium term.
QVG Capital
31 May 2025
$133.85
Summary
- Light & Wonder experienced a setback early in the month due to below-expectations Q1 results.
- QVG Capital's perspective shifted after reviewing Aristocrat’s numbers, leading to a reassessment of LNW’s March quarter from ‘disappointing’ to ‘not too bad in the circumstances!’
- The completion of the Grover acquisition was a significant development.
- QVG Capital has a positive outlook on the nascent charity gaming sector and appreciates Grover’s position within it.
- LNW held an investor day in New York City, which QVG Capital opted to attend virtually.
- QVG Capital found LNW’s goal of doubling earnings per share in 3 years compelling enough to engage with the event.
Endeavor Asset Management
30 Apr 2025
$132.45
Summary
- Light & Wonder (LNW) experienced a 12% decline in share price during April.
- Concerns are primarily related to ongoing litigation with Aristocrat Leisure.
- Endeavor Asset Management remains confident that LNW does not have significant contagion of wrongdoing throughout its business.
- Looking forward to the upcoming Investor Day in May.
- Anticipating a new 2–3-year plan from the business, especially regarding its newly acquired charitable gaming business, Grover Gaming.
QVG Capital
30 Apr 2025
$132.45
Summary
- QVG Capital notes that Light & Wonder is indirectly exposed to the US consumer, impacting sentiment towards the stock.
- Despite this, QVG Capital highlights Light & Wonder's strong track record in capital management.
- In previous instances, QVG Capital observes that Light & Wonder has effectively utilized share price weakness to repurchase stock.
- QVG Capital continues to hold its position based on these factors.
Ausbil Investment Management
30 Apr 2025
$132.45
Summary
- Centennial Asset Management believes Zip has the potential to rally in the short term.
- Zip is well positioned to deliver further strong growth in revenues and profitability.
- The US buy now, pay later market remains relatively immature, allowing Zip’s US footprint to grow rapidly.
- New product launches are expected to contribute to the company’s transaction volumes and earnings growth in the coming year.
- Zip’s balance sheet strength and ongoing buyback are expected to support share price performance.
- Zip has surprised the market with better-than-expected earnings over the past year.
- The company has upgraded expectations post the most recent quarter, indicating potential for additional upside earnings risk.
Bennelong Australian Equity Partners
31 Mar 2025
$139.87
Summary
- Bennelong Long Short Equity Fund continues to update its investment thesis on Light & Wonder Inc.
- Recent developments include Aristocrat launching legal action against Light & Wonder for alleged trade secret infringement
- The legal action involves only a limited number of games, suggesting minimal impact on LNW earnings
- This could indicate a sense of frustration from Aristocrat, aiming to impede Light & Wonder's growth
- Light & Wonder is capturing a significant market share across various games, independent of this case
- Bennelong Long Short Equity Fund remains confident in Light & Wonder's position in the market
Endeavor Asset Management
31 Mar 2025
$139.87
Summary
- Light & Wonder (LNW) declined by 20.7% in March.
- The decline resulted from the overall stock market sentiment and negative news related to legal proceedings with competitor Aristocrat Leisure (ALL).
- Endeavor Asset Management believes that the legal proceedings will create noise but will not fundamentally affect the business in the long term.
- Looking ahead, Endeavor Asset Management is looking forward to updated financial guidance and a 3-year business plan to be presented at the upcoming investor day in May.
Oracle Advisory Group
31 Mar 2025
$139.87
Summary
- Oracle Advisory Group updated their investment thesis on Light & Wonder Inc. (LNW).
- Transfer of LNW to the Australian Equities Portfolio from the Emerging Companies Portfolio.
- LNW has graduated into the ASX100.
- Oracle Advisory Group continues to hold because of LNW's growth potential and market presence.
- The transition reflects LNW's operational stability and increasing investor confidence.
Clime Investment Management
31 Mar 2025
$139.87
Summary
- Clime observed a detract in LNW due to rising concerns regarding the weakening US macroeconomic environment.
- There are potential impacts on consumer spending that contributed to this decision.
- Further litigation concerns were raised by Aristocrat (ALL.ASX), adding to the uncertainty surrounding the investment.
- As a result, Clime exited the position prior to the end of the month.
QVG Capital
31 Mar 2025
$139.87
Summary
- Detractors to performance included Light & Wonder, which experienced significant declines.
- Major competitor Aristocrat expanded the scope of their recent IP infringement case.
- Light & Wonder has a highly motivated board and management team.
- The company benefits from a multi-year game refresh cycle.
- Light & Wonder demonstrates best in class capital allocation.
- QVG Capital continues to hold the stock at a compelling valuation of 12x forward PE.
Ten Cap
31 Mar 2025
$139.87
Summary
- Light & Wonder (LNW) experienced a material reversal of prior month’s gains.
- The stock was impacted by an escalation of the ongoing intellectual property dispute with Aristocrat.
- Investor concerns are rising regarding the potential impact of weakening consumer activity on gaming volumes.
- Ten Cap's proprietary analysis incorporates long-term US gaming revenues, sentiment, and GDP-growth correlations dating back to the early 1990s.
- Direct engagement with management and industry participants provided context around legal and operational risks.
- Ten Cap continues to hold its position based on this comprehensive analysis and engagement.
Blackwattle Investment Partners
31 Mar 2025
$139.87
Summary
- Blackwattle Investment Partners notes that Light & Wonder (LNW) was a significant positive contributor to fund performance in February.
- However, LNW experienced a 21% decline in March due to an expanded lawsuit from Aristocrat.
- LNW has offered to replace Jewel of the Dragon gaming machines and cancel another unreleased game.
- The number of affected units is smaller than last year's withdrawal of 2,200 Dragon Train units.
- Last year, 95% of withdrawn units were converted to alternative leased games.
- LNW's North American installed base of leased machines grew by 9% over the year, exceeding 34,000 units.
- Jewel of the Dragon represents only about 150 units in the market.
- Concerns about a potential US recession have impacted US consumer discretionary stocks, including LNW.
- Despite short-term challenges, longer-term prospects remain sound for LNW.
- The stock’s PE is approximately 35% lower than Aristocrat, which has similar US consumer exposure.
Cooper Investors
31 Mar 2025
$139.87
Summary
- Positive feedback on Light & Wonder’s acquisition of Grover Charitable Gaming
- Robust industry structure with unique market offering and recurring revenue base
- Long-standing customer relationships support sustainably high margins of 80-85%
- Potential to enhance offerings by rolling out proprietary content
- Opportunities in higher-margin direct-to-consumer distribution in the digital sector
- Organic growth trends in iGaming, though new state openings have been slower than expected
- Long-term potential for legalisation of an estimated US$500bn unregulated grey market in gross gaming revenue
- This combination of factors is expected to drive a strong multi-year growth narrative
Perpetual Asset Management
31 Mar 2025
$139.87
Summary
- Perpetual Asset Management notes that Light & Wonder detracted from portfolio performance in March.
- The company's share price fell -20.7% due to heightened investor concerns around litigation risk from amended claims by Aristocrat.
- There is uncertainty regarding the impact of these claims on Light & Wonder, but the share price is currently reflecting a potential material earnings hit.
- Despite the litigation risks, operational performance remains strong with positive game performance and market share outcomes reported in March.
- Light & Wonder has a positive earnings growth outlook, bolstered by favourable competitive dynamics.
- The company benefits from a significantly improved game development platform, managed by an experienced team.
L1 Capital
27 Mar 2025
$162.94
Summary
- Strong performance reported by Light & Wonder Inc.
- Confident outlook for future growth.
- Robust results contributing positively to L1 Capital's portfolio.
- L1 Capital continues to hold due to optimistic market conditions.
- Investment thesis reflects positive sentiment towards the company's prospects.
Ten Cap
21 Mar 2025
$164.46
Summary
- Ten Cap continues to hold its position in Light & Wonder, Inc. due to its status as a key player in digital and land-based gaming solutions.
- Light & Wonder, Inc. is recognized as a global gaming company specializing in casino, digital, and lottery solutions.
- The company, formerly known as Scientific Games, underwent a rebranding in 2022.
- Headquartered in Las Vegas, it develops slot machines, iGaming, and mobile gaming content.
- Light & Wonder serves both casinos and online platforms worldwide.
L1 Capital
28 Feb 2025
$176.27
Summary
- Light & Wonder shares have rallied +23% following solid Q4 FY24 results.
- FY25 guidance reaffirmed for $1.4b EBITDA.
- Announcement of an earnings accretive acquisition of Grover Gaming.
- Favourable court ruling in Australia allows the Dragon Train game to remain in venues.
- This ruling denied Aristocrat Leisure’s request for an injunction.
- Strong earnings momentum observed across land-based gaming, SciPlay, and iGaming segments.
- L1 Capital believes this positions the company for double-digit EPS growth p.a. over the medium term.
Blackwattle Investment Partners
28 Feb 2025
$176.27
Summary
- Light & Wonder (LNW) contributed to the fund’s outperformance.
- The company reported 4Q24 gaming revenue growth of 4%, surpassing low investor expectations.
- Growth was driven by a mix of premium titles, alleviating concerns about reliance on Dragon Train.
- Light & Wonder announced the acquisition of Grover Gaming at an implied 7.7x EBITDA, expanding into charitable gaming.
- This acquisition provides a new distribution channel and potential for integration of existing titles.
- The potential for a sole ASX listing likely contributed to its outperformance.
- Light & Wonder's P/E ratio of 13x NPATA is discounted compared to Aristocrat's 24x.
- While a complete closure of this gap is not expected, improvements in accounting quality, balance sheet deleveraging, and execution of earnings targets should help narrow it.
Ausbil Investment Management
28 Feb 2025
$176.27
Summary
- Centennial Asset Management believes Zip has the potential to rally in the short term.
- Zip is well positioned to deliver further strong growth in revenues and profitability.
- The US buy now, pay later market remains relatively immature, allowing Zip’s US footprint to grow rapidly.
- New product launches are expected to contribute to the company’s transaction volumes and earnings growth in the coming year.
- Zip’s balance sheet strength and ongoing buyback are expected to support share price performance.
- Zip has surprised the market with better-than-expected earnings over the past year.
- The company has upgraded expectations post the most recent quarter, indicating potential for additional upside earnings risk.
Ten Cap
28 Feb 2025
$176.27
Summary
- Light & Wonder (LNW) experienced a robust month
- Legal risks are receding
- Earnings guidance has been reaffirmed
- Potential for a listing change driving strong re-rating
- LNW is trading at a significant discount to Aristocrat (ALL)
- LNW is exhibiting faster growth
- Ten Cap continues to view LNW's prospects favourably
- Increased LNW position ahead of its results
- Medium-term earnings guidance diminished risks
- The company shows strong fundamentals and attractive growth prospects
Endeavor Asset Management
28 Feb 2025
$176.27
Summary
- Light & Wonder (LNW) reported a strong February result with NPATA of $127 million, outperforming consensus by 5%
- Operational improvements and 853 premium leased machines added to its fleet contributed to performance
- The share price increased by 22.6% due to strong earnings and a positive outlook
- LNW announced plans to explore a dual ASX listing or primary ASX listing
- This potential listing may help narrow the 7x P/E valuation gap with Aristocrat (ALL)
- Endeavor Asset Management continues to view LNW as a core holding in the Endeavor Growth Equities Portfolio
- The investment philosophy is rooted in quality investments
Perpetual Asset Management
28 Feb 2025
$176.27
Summary
- Light & Wonder contributed to performance over February, rising +22.6%, after reporting solid operational performance despite disruptions.
- U.S. gaming operations grew and were the highlight of the result, with units up 850 sequentially and ahead of market expectations.
- Management attributed slower growth in its Sciplay business to a live operations strategy misstep, now corrected.
- I-gaming performed in line, and Light & Wonder divested its live casino segment due to pricing pressure.
- The CY25 outlook remains positive, with double-digit EBITDA growth expected despite a softer Q1 due to international sales timing.
- During February, Light & Wonder announced the acquisition of Grover Gaming, providing a platform to enter the charity gaming market.
- Expansion into adjacent markets such as charity gaming enables the company to leverage its core content capability over a wider distribution footprint.
- Looking ahead, Light & Wonder continues on its growth trajectory, with favourable competitive dynamics and ongoing investments in content development capability supporting the medium-term outlook.
Clime Investment Management
28 Feb 2025
$176.27
Summary
- LNW delivered a strong contribution throughout February
- 4Q24 results exceeded expectations
- Proposed acquisition of Grover Gaming
- Management reiterated AEBITDA guidance for 2025
- Acquisition expected to be earnings accretive from day one
- Positive outlook with effective management execution on strategy
- Clime continues to hold due to these robust factors
Oracle Advisory Group
31 Dec 2024
$137.16
Summary
- Oracle Advisory Group continues to hold a Buy rating on Light & Wonder (LNW) at 1.5%
- Light and Wonder is a US company, dual listed on the ASX
- Recently de-levered by selling lottery and sports betting businesses
- Current focus is solely on slot machines, both physical and online
- Under new management, primarily ex-Aristocrat executives
- Shift from being sales-focused to R&D-focused
- Potential to continue taking market share from smaller players
- Aims to solidify their number 2 position behind Aristocrat
- Asia identified as a significant growth driver
- Further upside to valuation anticipated
Equity Trustees Asset Management
31 Dec 2024
$137.16
Summary
- Equity Trustees Asset Management is drawn to the slot manufacturing industry due to recent consolidation.
- IGT is merging with Everi, with the combined entity expected to be acquired by Private Equity by mid-late 2025.
- Equity Trustees Asset Management believes Aristocrat and Light & Wonder will gain market share from the merging companies.
- LNW has a robust balance sheet and is heavily investing in game design.
- The fund manager sees a strong long-term earnings growth outlook for LNW.
- The fund manager initiated a position in LNW following a ~20% drop in stock price due to a preliminary injunction against its Dragon Train game.
- Equity Trustees Asset Management views the injunction as an isolated incident.
- Discussions with LNW management indicate sufficient product portfolio depth to offset the impact of the Dragon Train situation.
- LNW’s stock is considered undervalued and trades at a material discount to Aristocrat.
Endeavor Asset Management
30 Nov 2024
$145.70
Summary
- Endeavor Asset Management has added LNW to its portfolio.
- Light & Wonder Inc. is a global leader in cross platform games and entertainment.
- The company specializes in innovative game content, technology, and systems for various gaming markets.
- Strong financial performance is evidenced by impressive machine sales across all regions.
- Strategic divestment of non-core assets has strengthened the company's balance sheet.
- Management's confidence in achieving FY25 financial targets highlights potential for growth.
- 14% growth in Adjusted EBITDA is anticipated, driven by gaming operations.
- Market share gains are expected in North America and sales leadership potential in Australia.
- Endeavor Asset Management believes Light & Wonder offers compelling value and aligns with our investment strategy focused on quality growth opportunities.
- The company's robust product pipeline and strategic positioning in key markets will support future expansion.
Clime Investment Management
31 Oct 2024
$144.40
Summary
- LNW rebounded in October, positively contributing to portfolio performance.
- Customer feedback suggests that impacts from the Dragon Train injunction are isolated.
- Clime Investment Management views the injunction as a speed bump in the long-term growth strategy.
- LNW is well positioned to capture market share from competitors.
- The company's growth is driven by its content led gaming portfolio.
- There is an improving quality of earnings for LNW.
QVG Capital
30 Sept 2024
$132.63
Summary
- Light & Wonder's share price declined due to an unfavourable ruling in litigation with Aristocrat.
- The legal dispute involves intellectual property infringement claims, creating uncertainty for investors.
- Concerns include potential damages and restricted game sales.
- The company indicated that the game in question accounts for less than 5% of CY25’s forecast earnings.
- QVG Capital continues to hold because the company reaffirmed prior earnings guidance.
- Despite the challenges, the stock finished the month down -17.6%.
Ausbil Investment Management
30 Sept 2024
$132.63
Summary
- Light & Wonder (LNW) experienced a decline of -16.6% in the quarter.
- An adverse legal case led to a preliminary injunction affecting the game Dragon Train.
- Sales and placements of Dragon Train have been paused.
- Market concerns have arisen regarding LNW's future growth prospects.
- Despite setbacks, the company has maintained forward AEBITDA guidance of $1.4bn by 2025.
- Ausbil continues to hold confidence in LNW's ability to rollout superior alternative games.
- Ausbil believes LNW can continue its multi-year growth trajectory.
Paradice Investment Management
30 Sept 2024
$132.63
Summary
- Light & Wonder Inc. (LNW) is currently rated as overweight by Paradice Investment Management.
- In late September 2024, LNW faced a significant share price drop due to a legal challenge.
- A U.S. District Court granted a preliminary injunction against LNW, halting the commercialization of its Dragon Train slot machine.
- The ruling favored competitor Aristocrat Leisure, alleging trade secret misappropriation.
- This legal setback resulted in a one-day stock price decline of approximately 19%.
- Despite this, LNW reported strong Q2 2024 financial results, with an 11.9% year-over-year revenue growth.
- Growth was driven by solid performances in gaming, iGaming, and SciPlay segments.
- Paradice Investment Management believes LNW has positive prospects due to a diversified game portfolio.
- The company has reaffirmed its $1.4bn EBITDA target for FY25.
- Paradice views the stock as significantly undervalued given its growth potential.
- The team will attend the G2E Gaming Conference in Las Vegas in early October for further insights.
- Expectations for improved clarity on mitigation strategies concerning the Dragon Train litigation post-conference.
Clime Investment Management
30 Sept 2024
$132.63
Summary
- Clime Investment Management continues to hold its position in Light & Wonder Inc. (LNW) despite recent challenges.
- LNW experienced disappointing performance in September due to an initial court ruling injunction on its gaming title, Dragon Train.
- The risk of legal issues was known; however, the discovery process revealed new information previously unknown to LNW and the market.
- Intellectual property infringements are common in the gaming industry, which is a significant factor to consider.
- After conducting several industry channel checks, Clime Investment Management believes this issue will not hinder LNW's long-term market share growth.
- The current situation affects only one game out of the 130 developed by LNW each year.
Blackwattle Investment Partners
30 Sept 2024
$132.63
Summary
- LNW was the largest negative contributor to performance during the month, falling 18% in September.
- LNW received a "preliminary injunction" from the US District Court of Nevada, halting the commercialization of the new Dragon Train franchise globally.
- LNW is a global, cross-platform gaming company, one of three dominant players with Aristocrat and IGT.
- LNW is dual listed in the US, having listed on the ASX in mid-2023.
- LNW has been a core part of the portfolio since inception.
- Blackwattle Investment Partners recognizes significant upside potential from improving business quality due to LNW’s focus on reinvesting in content creation.
- The preliminary injunction may lead to losing the full court case to Aristocrat, which is disappointing.
- LNW is more than just the Dragon Train franchise, with the game generating less than 5% of earnings.
- Damages from the injunction are unlikely to be material, likely less than 1% of LNW’s market cap.
- The market reaction appears excessive but reasonable given the short-term uncertainty.
- This setback is viewed as a short-term opportunity within a multi-year improving quality narrative for LNW.
- LNW has a strong pipeline of new content, continuing to support strong and improving financial metrics.
Blackwattle Investment Partners
30 June 2024
$156.00
Summary
- LNW was the largest positive contributor to performance during the month.
- LNW rose 12% in June, on a delayed move from a strong 1Q24 result in May together with strong game performance in recent months from industry data.
- LNW is a global, cross-platform gaming company, and is one of three dominant players (with Aristocrat and IGT).
- LNW is dual listed in the US, having listed on the ASX mid-2023.
- LNW has been a core part of the portfolio since inception.
- Blackwattle Investment Partners recognized significant upside potential from improving business quality.
- LNW has been a turnaround story since 2020, with a new board led by former Aristocrat executives driving a simplification strategy.
- The board brought in new management (majority ex-Aristocrat), orchestrated asset sales, and implemented cost reductions leading to material de-gearing.
- With improved incentive structures, the business has attracted leading creative talent and added significant investment to design studios.
- LNW is beginning to realize the benefit of these changes, with exciting and popular new game titles capturing material market share.
- Blackwattle Investment Partners continues to see significant upside for LNW, as the reinvestment flywheel and scaling of the business continue to deliver strong and improving financial metrics.
Clime Investment Management
30 June 2024
$156.00
Summary
- LNW delivered strong outperformance through June.
- Industry survey data reveals positive momentum in gaming performances.
- 8 out of the top 25 premium leased & WAP games are key drivers of earnings growth.
- Success is underpinned by studio talent and ongoing investment in R&D.
- Clime Investment Management retains a positive outlook.
- Further market share gains expected at the expense of distracted competitors.
- Strong organic growth driven by the premiumisation of the North American install base.
- Continued momentum in SciPlay and market share gains within iGaming.
Clime Investment Management
31 May 2024
$142.32
Summary
- Clime Investment Management has increased its weighting to Light & Wonder Inc. (LNW) after a strong start to the year.
- Recent results have confirmed operational excellence and effective execution within the company.
- The firm believes LNW is well positioned for a re-rating due to its growth profile.
- Clime sees potential for LNW to close the gap to the current market leader, Aristocrat, over time.
Ausbil Investment Management
31 Mar 2024
$157.56
Summary
- Ausbil notes that Light & Wonder (LNW) returned +32.3% over the quarter, exceeding consensus earnings expectations.
- The strong 4Q results reinforce Ausbil's belief in LNW's potential.
- Ausbil sees LNW and market leader Aristocrat (ALL) taking market share from smaller competitors.
- Both companies are successfully reinvesting into new gaming franchises and IP.
- LNW has a promising lineup of new content tested in Australia, ready for launch in the US market in the upcoming quarters.
- Ongoing deregulation in the US iGaming sector adds to LNW's growth potential.
- Ausbil continues to hold LNW due to this compelling growth trajectory.
Milford Asset Management
28 Feb 2024
$154.94
Summary
- Light & Wonder Inc. experienced a strong earnings increase of 20.0%.
- The company is well positioned for growth with various opportunities, including game adjacencies.
- There is a significant rollout of premium content in iGaming.
- Milford Asset Management views Light & Wonder as a unique global growth investment opportunity.
- The firm perceives a strong medium-term growth profile for the company.
Blackwattle Investment Partners
28 Feb 2024
$154.94
Summary
- Light & Wonder delivered a strong 4Q23 result, indicating ongoing momentum towards its medium-term EBITDA target.
- Current consensus expectations are lower than the target, allowing for potential earnings upgrades.
- The positive result was driven by market share gains and an improvement in revenue yield.
- Blackwattle Investment Partners anticipates continued growth with the upcoming release of Dragon Train, the top-performing game in Australia, expected in the North American market in the March quarter.
Ausbil Investment Management
28 Feb 2024
$154.94
Summary
- Ausbil continues to hold its position in Light & Wonder (LNW) after a strong performance with +20.0% return over the month.
- The company reported 4Q results that exceeded consensus earnings expectations.
- Ausbil believes that LNW, alongside market leader Aristocrat (ALL), are capturing market share from smaller competitors.
- The successful reinvestment into new gaming franchises and IP continues to strengthen their market position.
- Ausbil is optimistic about a promising lineup of new content that has been tested in Australia and is set for launch in the lucrative US market.
- Ongoing deregulation in the US iGaming sector enhances the growth potential for LNW.
- Overall, Ausbil foresees a compelling growth trajectory ahead for Light & Wonder.
Clime Investment Management
28 Feb 2024
$154.94
Summary
- Clime Investment Management notes a recent pullback in LNW's share price after a strong performance.
- Channel checks indicate the pullback was not due to operational issues.
- Conditions in the key North American land-based segment remain positive.
- Gaming performance data suggests LNW can continue to drive market share gains.
- Recent weakness attributed to profit taking and AUD translation impacts.
- This situation has allowed Clime Investment Management to increase their position across portfolios.
- Overall conviction in LNW remains strong.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in Light & Wonder Inc CHESS (ASX:LNW)?
Fund managers including Endeavor Asset Management, L1 Capital, Ten Cap, Clime Investment Management, Cooper Investors, Bennelong Australian Equity Partners, Milford Asset Management, Blackwattle Investment Partners, Ausbil Investment Management, Oracle Advisory Group, Equity Trustees Asset Management, QVG Capital, Paradice Investment Management, Totus Capital, Perpetual Asset Management, SG Hiscock & Company and Ellerston Capital have invested in Light & Wonder Inc CHESS (ASX:LNW).
Why do fund managers invest in Light & Wonder Inc CHESS?
Fund managers invest in Light & Wonder Inc due to its solid operational performance and growth prospects. The company reported impressive earnings and reaffirmed its EBITDA guidance, indicating strong fundamentals. The recent acquisition of Grover Gaming broadens its market reach, particularly in charitable gaming, enhancing revenue streams. Additionally, it trades at a discount compared to Aristocrat Leisure, despite offering faster growth. Legal risks are being managed effectively, contributing to a favorable risk/reward profile as earnings momentum continues.
What happened to Light & Wonder Inc CHESS (ASX:LNW)?
Fund managers are actively investing in Light & Wonder Inc due to its strong fundamentals and medium-term growth potential, despite recent share price volatility. Key factors include the company's expected 20% EPS growth over the next three years, solid operational execution, and a healthy balance sheet supported by a robust gaming segment. The shift to a sole listing on the ASX is anticipated to attract passive buying, enhancing liquidity and market visibility. While short-term litigation risks and recent performance decline have affected sentiment, the long-term outlook remains compelling, with a valuation significantly lower than peers like Aristocrat. Overall, fund managers view the current situation as a buying opportunity.
What is the short interest in Light & Wonder Inc CHESS (ASX:LNW)?
The short interest in Light & Wonder Inc CHESS (ASX:LNW) is 1.83% which makes it the 145th most shorted stock on the ASX. Of the 80.3M shares that Light & Wonder Inc CHESS has on issue, 1.5M have been sold short.
What does Light & Wonder Inc CHESS (ASX:LNW) do?
Light & Wonder, Inc. is a cross-platform global games company, which engages in the development of content and digital markets. It operates through the following segments: Gaming, SciPlay, and iGaming. The Gaming segment includes the design, manufacture, marketing, and distribution of portfolio of gaming products and services. The SciPlay segment involves the development and publishing of digital games on mobile and web platforms. The iGaming segment focuses on the provision of digital gaming content, distribution platforms, player account management systems, and services. The company was founded on July 2, 1984 and is headquartered in Las Vegas, NV.
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