Global gaming company Light & Wonder Inc. NYSE: LNW was formerly Scientific Games. It's a worldwide leader in gaming machines and products for licensed casinos, lotteries and gaming markets based in Las Vegas, Nevada. Its products include casino slot machines, tabletop games, lottery systems, sports betting solutions and digital gaming solutions.
Clients utilize its products and services in over 100 countries. Light & Wonder has grown through acquisition. They completed 100% of the acquisition of SciPlay Co. NASDAQ: SCPL, which they initiated in December 2021, a leading provider of social media gaming with over $180 million in sales.
It acquired SG Digital 2022, a sports betting, gaming and online gaming provider. These acquisitions expand Light & Wonder’s footprint in digital gaming. It competes with International Gaming Technology PLC (NYSE IGT), a mega slots and gaming machines supplier to licensed casinos.
The Many Parts of the Whole
Light & Wonder had expanded its footprint into social gaming, mobile gaming and online gaming casinos with its completion of SciPlay. SciPlay has a 40% YoY revenue growth rate, contributing 27% of the revenues or $671 million in 2022. SciPlay generated $22 million in 2012 and has grown 2X faster than the social casino market.
iGaming
iGaming generated $240 million and 9% of total revenues. SciPlay targets 1 to 2 new game launches annually and a direct-to-consumer platform launch in 2023. iGaming Live-Casino is launching in Michigan due to the passage of its iGaming legislation for DraftKings Inc. NASDAQ: DKNG and Golden Nugget Online. Each new region that legalizes sports betting and iGaming is a win for the Company.
Casino Gaming
Its main gaming business of video slot machines, tabletop games and gaming supplies brought in the lion’s share of revenues at 64% or $1.6 billion in full-year 2023. The Company has over 4,800 live games with over 4.5 billion monthly game spins. It has over 300 operator brands, including Draft Kings, MGM Resorts International NYSE: MGM, BetMGM, Caesar’s Entertainment Inc. NASDAQ: CZR and Golden Nugget.
Growth Metrics Improving
On May 9, 2023, Light & Wonder reported its fiscal Q1 2023 earnings for the quarter ended in March 2023. The Company reported an earnings-per-share (EPS) profit of 23 cents missing consensus analyst estimates by $0.03. Revenues grew 17.1% year-over-year (YoY) to $670 million, beating analyst expectations of $632.14 million. The Board of Directors approved a secondary Australian Securities Exchange (ASX) listing.
Revenues by Business Segment
Gaming revenues rose 18% to $419 million, driven by robust Gaming machine sales, operations and systems. Gaming machine sales rose 53% YoY, shipping 7,600 units globally, 4,000 in the U.S. and 3,600 internationally. SciPlay hit record revenues of $186 million, up 18% YoY.
Strength was driven by its core social casino business, gaining market share and delivering strong player metrics. iGaming revenue hit another quarterly record of $65 million, up 10% YoY. Robust growth in the U.S. is driving sales.
Light & Wonder CEO Matt Wilson commented, “This new approach is already producing results. Eight key game themes will be fully launched tri-channel throughout the year.
Five digital native games will debut in the land-based market, and 38 land-based titles will go into the digital ecosystem this year. These significant milestones further validate that proven games are in demand and players want to play their favorite games across multiple platforms.”
Light and Wonder analyst ratings and price targets are at MarketBeat.
Weekly Cup and Handle Breakout Attempt
The weekly candlestick chart on LNW illustrates a cup and handle breakout attempt. The cup lip line started at $69.80 in November 2022. LNW shares sank to a low of $40.10 by September 2022. It formed a sharp, rounded bottom and staged a rally back up to retest the lip line by June 2023. Shares pulled back to $53.77 in March 2023.
LNW formed a weekly market structure low (MSL) breakout through the $60.16 trigger to the lip line forming the handle. Shares are still testing the lip line after overshooting it in July 2023. The weekly relative strength index (RSI) coiled back up to the 60-band, where it's stalling.
Pullback support levels are at $62.16, $60.16 weekly MSL trigger, $57.64 and $53.77 handle low.
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