Light & Wonder has revealed its forecast for the coming years of more than $2 billion by the year 2028. In spite of a slightly rough start this year, the slot machine manufacturer still projects earnings of $1.4 billion in 2025, and it doesn't include the benefits it is projected to gain from the acquisition of G2 Gaming, Inc. and Grover Gaming.

On a difficult day for the broader stock market and gaming sector, Light & Wonder has emerged as a rare bright spot, unveiling a bold long-term forecast during its investor day event. The slot machine manufacturer announced it is targeting $2 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by 2028 - a significant leap from current levels.

Reaffirming 2025 targets despite Q1 hurdles

Despite challenges during the first quarter of the year, Light & Wonder reaffirmed its 2025 adjusted EBITDA guidance of $1.4 billion. This projection, which suggests a compound annual growth rate of 15% since 2022, does not account for potential synergies and revenue boosts from its recent $850 million acquisition of assets from G2 Gaming, Inc. and Grover Gaming, Inc. Analysts welcomed the reaffirmation as a sign of stability amid headwinds. The company also expects its earnings per share to double by 2028, rising from $5.27 in 2024 to $10.55.

Jeffrey Stantial, an analyst from Stifel, noted that the long-term targets were 'sufficiently achievable' and even 'conservative' when compared to the company's peers. "Implied organic growth still nicely outpaces most rivals," he wrote in a client note. He also cited improved clarity surrounding ongoing litigation with Aristocrat Leisure, adding that a resolution could act as a catalyst for the stock, which he rates hold with a $95 target.

Grover Gaming acquisition a driver of key growth

A major focal point for Light & Wonder's future is its recent acquisition of Grover Gaming and G2 Gaming - a deal seen by many as a potential growth engine, particularly in the charitable gaming sector.

David Katz, a Jefferies analyst, highlighted the acquisition's immediate impact, noting it should add approximately 10,000 units to the company's installed base. He also pointed to the legalization of electronic charitable pull-tab devices in Indiana, where operations are set to commence on July 1, 2025. Katz estimates an additional 1,200 units could be deployed in the state by 2026.

"It [the Grover acquisition] should add 10K units immediately, with a path to upgrade content in five existing markets and new units in Indiana," Katz noted. "We've added the legacy 10K units to our installed base at an estimated $37 WUD."

Charitable gaming offers casino-style wagering through lotteries, slot machines, and table games, but is operated by nonprofit organizations rather than commercial or tribal casinos. Light & Wonder, already a major player in the slot machine space, stands to benefit from Grover's strong financials - including its $111 million in adjusted EBITDA for 2024 and EBITDA and revenue CAGRs of 31% and 29% from 2022 to 2024.

Australian listing strategy remains in focus

Nearly two years after debuting a secondary listing on the Australian Securities Exchange, Light & Wonder is also considering expanding its presence there. The company's primary listing remains on the Nasdaq, but analysts and shareholders continue to speculate on the potential shift in strategic emphasis.

According to Katz, about 62% of Light & Wonder's issued share capital is tied to the US listing, with the remainder linked to Australia. The company expressed interest in joining the ASX 100 and eventually the ASX 50 - two of Australia's key stock indices. It has already achieved inclusion in the Russell 1000 Index in the United States.

While some view Light & Wonder's 2028 forecast as conservative, it sets a strong foundation for steady growth. With strategic acquisitions like Grover, potential legal clarity, and expanding geographic footprints, analysts believe the company is well-positioned to outperform its peers in the coming years.