Macquarie analysts are forecasting that Light & Wonder will achieve Adjusted EBITDA of US$1.94 billion by 2028, falling just short of the company’s recently declared US$2 billion EBITDA target — but with room for growth following the recent acquisition of Grover Gaming.
Light & Wonder’s new US$2 billion EBITDA target for 2028 was unveiled during a recent investor day, with the company stating at the time that reaching this goal relies on achieving 400 basis points of market share gains in the North American premium installed base and global game sales. Light & Wonder explained that it plans to expand its gaming market share through optimized business operations; leverage its hardware and content into the charitable gaming segment following the acquisition of Grover Gaming; utilize the SciPlay engine across existing games; and focus resources on high-margin content in iGaming.
In an overnight note, Macquarie said its forecast for Light & Wonder falls 3% short of the company’s own target, although it is 5% above clear performance indicators.
The Macquarie team, led by Chad Beynon, also sees potential for the company to exceed its forecast through growth at Grover Gaming.
SciPlay, Light & Wonder’s social gaming arm, “may see some benefit from a recent U.S. court decision prohibiting Apple from banning access to direct-to-consumer platforms,” they added. That ruling by the 9th U.S. Circuit Court of Appeals — which relates to a dispute between Apple and “Fortnite” developer Epic Games — rejected Apple’s request to pause a federal judge’s order requiring it to immediately open its App Store to more competition.
Regarding the Grover Gaming acquisition, Macquarie forecasts a US$196 million EBITDA contribution by the new subsidiary by 2028, implying a 15% four-year CAGR. This may prove conservative, the analysts added, considering recent trends, and refreshing the footprint with newer games and cabinets may boost win per day.
Grover, which operates in the charitable gaming space, currently has 10,000 ePull Tab machines and boasts a 60% market share in its five operational states. The company may also gradually expand into some of the other six states with a pull tab market.
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