Light & Wonder’s newly initiated US$2 billion Adjusted EBITDA target is reasonable and in line with expectations, with the company also providing a pathway for its share price to grow further, according to Truist Securities.
The global gaming firm announced its new US$2 billion target during an Investor Day this week, representing a significant increase from the US$1.4 billion in Adjusted EBITDA it has set itself for 2025.
In a note, Truist’s Barry Jonas and Patrick Keough said the 2028 target implies a 10% CAGR (compound annual growth rate) but seems achievable given the recent acquisition of the charitable gaming assets of Grover Gaming. The charitable gaming market in the United States is valued at US$4.4 billion annually with Grover operating in five of the 11 states in which charitable gaming is legal.
“[Light & Wonder] management expects Grover to provide meaningful contribution to its 2028 target by leveraging Light & Wonder’s premium content to grow in existing states,” Truist wrote. “Additionally, Light & Wonder plans to expand device profitability by enhancing player experience through improved game mechanics. Lastly, Light & Wonder sees opportunity into other legal jurisdictions such as Minnesota and Maryland, which management expects to enter by 2026.”
The company outlines other pathways to US$2 billion during its Investor Day, including achieving 400 bps market share gains in the North American premium install base and global game sales plus sizeable games in its SciPlay arm.
In a press release issued Thursday morning (Asia time), Light & Wonder’s President and CEO Matt Wilson said, “We value the investment community’s involvement in our 2025 Investor Day and their ongoing support of Light & Wonder as the leading cross-platform global games company. The presentation reflected Light & Wonder’s major achievements over the past three years, offered insights into our strategic roadmap through 2028, and highlighted the strength of our diverse portfolio, and the quality of our team.
“Our success is grounded in our financial discipline and culture of efficiency and excellence, which have enabled us to create a more agile business and drive margin expansion and profitability. Supported by the strength of our diverse portfolio, our financial profile and our team, we will continue advancing our proven omni-channel strategy with a focus on building industry leading games to deliver on our 2028 financial targets of Consolidated Adjusted EBITDA of US$2.0 billion and doubling of Adjusted NPATA per share to over US$10.55, to create substantial value for our shareholders.”
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