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Why Is Light & Wonder (LNW) Up 9.1% Since Last Earnings Report?
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A month has gone by since the last earnings report for Light & Wonder (LNW - Free Report) . Shares have added about 9.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Light & Wonder due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Light & Wonder Q1 Earnings Top on Solid Revenue Growth
Light & Wonder reported strong first-quarter 2024 results, wherein both the top and bottom lines beat the respective Zacks Consensus Estimate. The Las Vegas-based cross-platform games and entertainment company reported double-digit revenue growth year over year in each of the segments for six consecutive quarters, which exemplified its portfolio strength and resilient business model.
Bottom Line
Net income for the reported quarter increased to $82 million or 88 cents per share from $22 million or 23 cents per share a year ago, primarily driven by top-line growth. Quarterly earnings comprehensively beat the Zacks Consensus Estimate by 23 cents.
Revenues
Total revenues for first-quarter 2024 rose to $756 million from $670 million in the prior-year quarter, backed by healthy growth in all business segments. The top line beat the consensus estimate of $732 million. This is the 12th consecutive quarter of consolidated revenue growth for the company. While Services revenues increased to $517 million from $477 million, that from Products grew 23.8% to $239 million.
Gaming revenues soared 14% year over year to $476 million as solid growth in Gaming machine sales and positive demand trends for Gaming operations, systems and tables supported the top-line improvement from this segment.
Revenues from SciPlay were record high, increasing 11% year over year to $206 million, primarily driven by the core social casino business and the acquisition of the privately held mobile and social game company Come2Play.
iGaming revenues increased 14% to a record high tally of $74 million. Healthy traction in the United States and international markets boosted net sales in this segment.
Other Details
Non-GAAP consolidated AEBITDA was $281 million, up 12.8% year over year, driven by growth in the Gaming business. AEBITDA margin was 37%, on par with the year-ago quarter’s figure.
Cash Flow & Liquidity
The company generated a cash flow of $171 million from operating activities in the first quarter. As of Mar 31, 2024, it had $450 million in cash and cash equivalents with $3.85 billion of long-term debt. The company repurchased approximately 0.2 million shares during the quarter for about $25 million. Since the initiation of the program, Light & Wonder returned $600 million of capital to shareholders through the repurchase of approximately 9.7 million shares, representing 80% of the total share buyback authorization.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Light & Wonder has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Light & Wonder has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Light & Wonder belongs to the Zacks Gaming industry. Another stock from the same industry, PENN Entertainment (PENN - Free Report) , has gained 6.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
PENN Entertainment reported revenues of $1.61 billion in the last reported quarter, representing a year-over-year change of -4%. EPS of -$0.79 for the same period compares with $0.31 a year ago.
For the current quarter, PENN Entertainment is expected to post a loss of $0.27 per share, indicating a change of -156.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -16.4% over the last 30 days.
PENN Entertainment has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Why Is Light & Wonder (LNW) Up 9.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Light & Wonder (LNW - Free Report) . Shares have added about 9.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Light & Wonder due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Light & Wonder Q1 Earnings Top on Solid Revenue Growth
Light & Wonder reported strong first-quarter 2024 results, wherein both the top and bottom lines beat the respective Zacks Consensus Estimate. The Las Vegas-based cross-platform games and entertainment company reported double-digit revenue growth year over year in each of the segments for six consecutive quarters, which exemplified its portfolio strength and resilient business model.
Bottom Line
Net income for the reported quarter increased to $82 million or 88 cents per share from $22 million or 23 cents per share a year ago, primarily driven by top-line growth. Quarterly earnings comprehensively beat the Zacks Consensus Estimate by 23 cents.
Revenues
Total revenues for first-quarter 2024 rose to $756 million from $670 million in the prior-year quarter, backed by healthy growth in all business segments. The top line beat the consensus estimate of $732 million. This is the 12th consecutive quarter of consolidated revenue growth for the company. While Services revenues increased to $517 million from $477 million, that from Products grew 23.8% to $239 million.
Gaming revenues soared 14% year over year to $476 million as solid growth in Gaming machine sales and positive demand trends for Gaming operations, systems and tables supported the top-line improvement from this segment.
Revenues from SciPlay were record high, increasing 11% year over year to $206 million, primarily driven by the core social casino business and the acquisition of the privately held mobile and social game company Come2Play.
iGaming revenues increased 14% to a record high tally of $74 million. Healthy traction in the United States and international markets boosted net sales in this segment.
Other Details
Non-GAAP consolidated AEBITDA was $281 million, up 12.8% year over year, driven by growth in the Gaming business. AEBITDA margin was 37%, on par with the year-ago quarter’s figure.
Cash Flow & Liquidity
The company generated a cash flow of $171 million from operating activities in the first quarter. As of Mar 31, 2024, it had $450 million in cash and cash equivalents with $3.85 billion of long-term debt. The company repurchased approximately 0.2 million shares during the quarter for about $25 million. Since the initiation of the program, Light & Wonder returned $600 million of capital to shareholders through the repurchase of approximately 9.7 million shares, representing 80% of the total share buyback authorization.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Light & Wonder has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Light & Wonder has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Light & Wonder belongs to the Zacks Gaming industry. Another stock from the same industry, PENN Entertainment (PENN - Free Report) , has gained 6.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
PENN Entertainment reported revenues of $1.61 billion in the last reported quarter, representing a year-over-year change of -4%. EPS of -$0.79 for the same period compares with $0.31 a year ago.
For the current quarter, PENN Entertainment is expected to post a loss of $0.27 per share, indicating a change of -156.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -16.4% over the last 30 days.
PENN Entertainment has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.