Fact based stock research
Light & Wonder (NasdaqGS:SGMS)

US80874P1093

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Light & Wonder stock research in summary

scientificgames.com

ANALYSIS: With an Obermatt Combined Rank of 30 (worse than 70% compared with investment alternatives), Light & Wonder (Casinos & Gaming, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Light & Wonder are low in value (priced high) with a consolidated Value Rank of 7 (worse than 93% of alternatives). But they show above-average growth (Growth Rank of 73) and are safely financed (Safety Rank of 52, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 30, is a hold recommendation based on Light & Wonder's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Light & Wonder exhibits low value (Obermatt Value Rank of 7), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 73). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 52) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	7
Growth Rank	73
Safety Rank	52
Combined Rank	30

Country	USA
Industry	Casinos & Gaming
Index	NASDAQ, S&P MIDCAP
Size class	Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Light & Wonder

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	80	35	10	7
GROWTH
GROWTH	86	21	45	73
SAFETY
SAFETY	32	24	39	52
SENTIMENT
SENTIMENT	n/a	48	67	^new
360° VIEW
360° VIEW	n/a	15	27	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Light & Wonder is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	80	35	10	7
GROWTH
GROWTH	86	21	45	73
SAFETY
SAFETY	32	24	39	52
COMBINED
COMBINED	74	8	6	30

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Light & Wonder the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 7 (worse than 93% compared with alternatives), Light & Wonder shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Light & Wonder. Price-to-Sales is 24 which means that the stock price compared with what market professionals expect for future profits is higher than 76% of comparable companies, indicating a low value concerning Light & Wonder's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 17, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Light & Wonder. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 39 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 7, is a sell recommendation based on Light & Wonder's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Light & Wonder? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Light & Wonder? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Light & Wonder may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	54	36	25	24
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	71	28	30	39
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	98	91	17	17
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	80	35	10	7

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Light & Wonder; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 73 (better than 73% compared with alternatives), Light & Wonder shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Light & Wonder. Sales Growth has a rank of 54 which means that currently, professionals expect the company to grow more than 54% of its competitors. Both Profit Growth, with a rank of 92, and Stock Returns, with a rank of 57, are also above average. But Capital Growth only has a rank of 37, which means that, currently, professionals expect the company to grow its invested capital less than 63% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 73, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	46	1	53	54
PROFIT GROWTH
PROFIT GROWTH	71	67	10	92
CAPITAL GROWTH
CAPITAL GROWTH	n/a	47	51	37
STOCK RETURNS
STOCK RETURNS	92	65	83	57
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	86	21	45	73

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Light & Wonder.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 52 (better than 52% compared with alternatives), the company Light & Wonder has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Light & Wonder is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Light & Wonder. Refinancing is at 67, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 67% of its competitors. Liquidity is also good at 50, meaning the company generates more profit to service its debt than 50% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 29, which means the company has an above-average debt-to-equity ratio. It has more debt than 71% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 52 (better than 52% compared with alternatives), Light & Wonder has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Light & Wonder could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Light & Wonder and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	2	6	32	29
REFINANCING
REFINANCING	63	75	69	67
LIQUIDITY
LIQUIDITY	34	39	35	50
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	32	24	39	52

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Light & Wonder and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	11	56	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	30	67	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	80	43	^new
MARKET PULSE
MARKET PULSE	n/a	60	58	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	48	67	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Light & Wonder.
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