Analyst David Katz of Jefferies Equity Research visited Light & Wonder’s booths at both the Global Gaming Expo in Las Vegas and Grover Gaming’s showcase in Louisville, Kentucky. Following his visits, Katz shared his observations in an October 11 investor note, underscoring his view that Light & Wonder offers a compelling proposition for investors focused on the long term.
“We continue to see a strong value proposition for investors with a long-term horizon,” Katz wrote. While he acknowledged that some near-term pressures could impact the company, he highlighted Grover Gaming’s integration as a key driver of market share expansion.
Grover Acquisition and Charitable Gaming Opportunities
The absorption of 600 Grover units brings Light & Wonder’s charitable-gaming installed base to over 11,000 devices, Katz reported. He projected that growth would accelerate soon, citing the launch of charitable gaming in Indiana, medium-term expansion plans into states such as Minnesota and Maryland, and the planned integration of Light & Wonder content into Grover’s product suite by early 2026.
Due to limited public comparisons, Katz described the Grover acquisition as “an underappreciated growth opportunity.” He noted that while its economics aren’t as striking as slot machines—Grover units in Kentucky average $100 per device per day at a $5 maximum wager—the potential for scale underpins optimism. He estimated a $4.4 billion market potential for the subsector, with additional growth anticipated as more states adopt charitable gaming and slot machine caps are eased in jurisdictions like Virginia.
“That said, near-term potential stems from continued customer education and distribution,” Katz added, pointing out that Grover’s electronic table games generate three to four times more action than traditional paper pull-tabs.
At the Las Vegas expo, Light & Wonder shared updates across all business verticals, demonstrating its strategy to balance short-term customer priorities with long-term growth goals. Katz noted that the company aims to expand both market share and its terrestrial product portfolio, aligned with trends among contemporary gaming operators.
iGaming Expansion and Strategic Assets
Digital growth remains a key focus. Light & Wonder holds a 12.8 percent iGaming market share in the U.S., and Katz highlighted its “strong Systems suite” as another asset supporting long-term value.
He also addressed near-term headwinds, including ongoing litigation with Aristocrat Leisure and delisting from NASDAQ. “With the delisting targeted for the end of November and our view that the lawsuit should result in a settlement before trial, estimated for June/July 2026, we reiterate our belief that these events are not impacting the company’s growth trajectory,” Katz wrote.
Light & Wonder’s projected 2028 cash flow stands at $2 billion, with revenue expected to reach $4.0 billion and earnings $698.8 million, reflecting a 7.8% annual growth rate.
Investment Considerations and Risks
Recent quarterly results showed revenue declines year-over-year, drawing attention due to contrasts with industry peers and raising questions about momentum amid ongoing CapEx delays at casinos. Katz highlighted the expanded share repurchase program, now at $1.5 billion, as a signal of confidence, while cautioning that buybacks could heighten leverage risks if earnings underperform.
Source:
“Light & Wonder a long-term value, analyst says”, cdcgaming.com, October 13, 2025
The post Light & Wonder Seen as Long-Term Value Despite Near-Term Challenges first appeared on RealMoneyAction.com.