Light & Wonder Stands Out After Forecasting $2B in 2028 Earnings
On a challenging day for the overall market and gaming shares, Light & Wonder (NASDAQ: LNW) distinguished itself by informing shareholders that it anticipates achieving $2 billion in adjusted EBITDA for 2028.
Despite a tough first quarter, the slot machine producer confirmed its projected adjusted EBITDA of $1.4 billion for the year. That prediction suggests a compound annual growth rate (CAGR) of 15% since 2022 and does not account for possible advantages from the recently finalized $850 million purchase of the charitable gaming assets from Grover Gaming, Inc. and G2 Gaming, Inc.
Light & Wonder's 2028 adjusted EBITDA prediction anticipates that the firm will achieve about a 4% increase in market share within the North American premium slot sector, with earnings per share rising to $10.55 from last year's $5.27. Analysts consider the Light & Wonder 2028 projection to be cautious, yet there is potential to outpace competitors during that timeframe.
"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 mentioned that there’s greater clarity concerning Light & Wonder’s legal issues with competitor Aristocrat Leisure, and if this resolves in the near future, it could serve as a catalyst for the stock, which he has rated as “hold” with a $95 price target.
Grover Acquisition Might Be a Catalyst for Growth
Certain analysts see the Grover agreement as a possible growth driver for Light & Wonder, especially in Indiana where e-pull charitable devices have recently been legalized.
“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 includes the financial risks and possible earnings linked to conventional casino betting, but it stands out because it’s not run by a commercial or tribal entity or a governmental body. Instead, a charity manages it and assigns gameplay to a company like Grover. It is available in multiple formats, such as lotteries, table games, and slot machines — a sector where Light & Wonder is a leading player.
Grover is financially successful, as demonstrated by its $111 million adjusted EBITDA for 2024. Between 2022 and 2024, the firm recorded EBITDA and revenue CAGRs of 31% and 29%, respectively, as stated in Light & Wonder's investor presentation.
Analysis of Australia's Listing
Light & Wonder is approximately two years past the time it listed its shares in Sydney. This is regarded as a secondary listing, with the Nasdaq in New York serving as the main listing location for the stock, but there have been discussions about the gaming device maker possibly shifting to an exclusive listing in Australia.
Katz from Jefferies highlights that 62% of the company's issued share capital comes from the US listing, while the rest is from Australia.
In its investor presentation, Light & Wonder highlights its goal to enter the ASX 100 and subsequently the ASX 50, which are two key indices of Australian equities. The company has successfully reached its objective of being listed in the Russell 1000 Index in the United States.
