Light & Wonder, Inc. (NASDAQ:LNW) just released its latest first-quarter results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 5.4% to hit US$756m. Light & Wonder also reported a statutory profit of US$0.88, which was an impressive 35% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Light & Wonder's 16 analysts is for revenues of US$3.17b in 2024. This reflects a reasonable 6.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 63% to US$4.03. Before this earnings report, the analysts had been forecasting revenues of US$3.13b and earnings per share (EPS) of US$3.73 in 2024. So the consensus seems to have become somewhat more optimistic on Light & Wonder's earnings potential following these results.
The consensus price target was unchanged at US$106, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Light & Wonder at US$130 per share, while the most bearish prices it at US$76.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Light & Wonder is forecast to grow faster in the future than it has in the past, with revenues expected to display 8.0% annualised growth until the end of 2024. If achieved, this would be a much better result than the 2.0% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 9.7% annually for the foreseeable future. Although Light & Wonder's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Light & Wonder's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Light & Wonder's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$106, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Light & Wonder going out to 2026, and you can see them free on our platform here..
Even so, be aware that Light & Wonder is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.