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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Light & Wonder, Inc. (XNAS:LNW) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SGMS
Name:
LIGHT & WONDER, INC. (XNAS:LNW)
Sector:
51.00M
Industry:
Gambling
CEO:
Mr. Michael Chambrello
Total Employees:
9,500
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 0.00% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF LIGHT & WONDER, INC.(LNW) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND GAMBLING INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
46.19
One Month Price Target:
$46.63
Six Month Price Target :
$48.8
Likely Price in One Year's Time:
Ticker:
$51.41
Likely Trading Range Today Under (Normal Volatility)
$45.87
Price Upper limit ($) :
$46.72
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$41.11
This week:
$34.84
This month :
$23.48
Other Primary facts
Market Cap:
4.27B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
94.33M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
40.76%
-30.68%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$69.73
$58.80
$22.65
$33.58
Medium risk (<10%) entry points
Buy Call
Sell Call
$55.24
Buy Put:
Sell Put:
$52.90
$37.11
$39.48
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SGMS
Sharpe Ratio:
3.95%
Comparison:
SGMS, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 12.27% higher than the industry
& ratio is 73.21% higher than the market/S&P 500 average
Average Returns/Yield of
SGMS
Daily returns:
0.22%
Weekly returns:
1.12%
Monthly returns:
4.49%
Yearly returns:
41.17%
Comparison of returns:
Average annual returns/yield (last 3 years) is 30.86% above industry average
Classification:
SGMS, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.94
Statistical test of Returns:
SGMS has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
5.46%
Weekly Volatility:
12.21%
Monthly Volatility:
24.43%
Yearly Volatility:
84.62%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.87%
Volatility in last five trading days has been -84.05% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-10.99%
Weekly VaR:
-24.58%
Monthly VaR:
-49.16%
How Much Can the price of
SGMS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-41%
Worst case (decline):
>85%
This translates to price declining to:
$27.30
This translates to price declining to:
$6.93
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SGMS is a 246.99% riskier investment compared to the market/S&P 500 & is 197.26% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 21.11% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SGMS
Beta in relation to market/S&P 500--1.68
Expected beta in 1 year's time:
1.112
Expected beta in 3 year's time:
1.573
Unlevered (debt free) Beta:
0.198
Beta in relation to Nasdaq (XNAS):
1.595
Beta in relation to all global stocks::
1.356
Beta Comparison & Analysis
Beta of competitors/peers::
1.288
Beta is 30.54% higher than peers
Average Industry Beta:
1.398
Beta is 20.31% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.392
Alpha is 37.83% above industry average alpha yield
Alpha is 2496% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SGMS
Equity cost of capital:
0.147
Equity cost of capital is 15.28% above industry mean WACC
Unlevered (without debt) cost of capital:
1.73%
Before-tax cost of debt:
5.33%
After-tax cost of debt:
4.21%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.21%
WACC is -33.71% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$27.26
Revenue growth rate per share of (3Y):
-2.04
Annual revenue growth rate is -157.85% below industry average
EPS:
-
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
-
-
-
Debt per share
$93.60
EBITDA per share
$10.66
Valuation Analysis Today of
SGMS
P/E Ratio:
26.96
P/E Ratio of Competitors/Peers:
972.56
P/E ratio is -97.23% lower than main peers & is 10.60% higher than the industry
-
-
-
-
P/S (Price to Sales ratio):
1.69
Price to sales ratio is -60.74% below the industry mean
P/B (Price to book value ratio):
-2.04
-
Price to free cash flow ratio is -21.73% lower than the industry
Net income growth rate (3Y):
-199.90%
Net income growth rate is -190.76% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
-385.71%
Net debt to equity ratio:
-365.97%
Debt to assets ratio:
111.03%
Net debt to assets ratio:
105.34%
Debt-to-asset ratio is -23.60% below industry average
Ability to repay debt:
Interest coverage ratio:
2.13
Interest coverage ratio is 60.42% more than industry average
Looking forward:
Debt growth rate:
-6.16%
Annual debt growth is -102% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.90%
Analysis of Key Statistics
Correlation of price movement with the market:
0.53
Statistical significance of correlation:
SGMS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.533
Stock price is -0.63% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.533
Correlation of price movement with Nasdaq (^IXIC):
-0.019
Covariance of price movement with the market:
-0.062
Kurtosis
12.365
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.704
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
SGMS
Gross Profit Margin Ratio:
280%
Operating Profit Margin Ratio:
9.37%
Operating profit margin is -149.36% lower than the industry
Net Profit Margin Ratio:
280%
Effective Tax Rate:
294.39%
Effective tax rate is 75.43% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-18.00%
Return on equity (ROE) is 1113.35% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.18%
Return on assets (ROA) is -272.00% lower than the industry
Financial Leverage:
-9.1x
Current Ratio:
1.89
Current ratio is -15.06% below industry average
Cash Conversion Cycle (days):
-17
Cash conversion cycle is -125.40% below industry average
The remaining useful life of property plant & equipment is: 18.5 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
270.6K
Each employee generates -9% less revenue than industry average revenue per employee
EBITDA generated per employee:
105.9K
Each employee generates -1% less EBITDA than industry average revenue per employee
Profit generated per employee:
43.4K
Each employee generates -8% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
5.4K
Each employee generates -50% less free cash flow than industry average revenue per employee
Assets/Capital per employee
652.2K
Each employee generates -50% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 14.46%
Growth rate in R&D investment/expenditure is 533.18% higher than the industry
Competitors/Peer firms of
SGMS
COLUMBIA SPORTSWEAR COMPANY (XNAS:COLM)
THE GOODYEAR TIRE & RUBBER COMPANY (XNAS:GT)
TEXAS ROADHOUSE, INC. (XNAS:TXRH)
REYNOLDS CONSUMER PRODUCTS INC. (XNAS:REYN)
FOX FACTORY HOLDING CORP. (XNAS:FOXF)
BRP Inc. (XNAS:DOOO)
THE WENDY'S COMPANY (XNAS:WEN)
DRIVEN BRANDS HOLDINGS INC. (XNAS:DRVN)
GLOBAL-E ONLINE LTD (XNAS:GLBE)
Current Analyst Ratings
Strong buy�4%
Buy�8%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
2.57B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
786.00M
1.79B
204.00M
-
721.00M
-
436.00M
1.36B
-
473.00M
436.00M
1.01B
241.00M
412.00M
- 107000.00K
- 315000.00K
412.00M
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
- 68000.00K
Accounts Receivables:
-
Other Working Capital:
- 68000.00K
Other Non-Cash Items:
134.00M
Net Cash Provided by Operating Activities:
94.00M
Investments in PP&E:
-
Net Acquisitions:
- 108000.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
496.00M
-
496.00M
431.00M
113.00M
716.00M
1.76B
247.00M
2.98B
998.00M
-
344.00M
1.63B
6.20B
-
7.95B
198.00M
44.00M
-
-
685.00M
927.00M
8.83B
291.00M
9.16B
-
10.09B
1.00M
- 3132000.00K
- 298000.0K
-
March 31, 2022 at 6:00:00 AM
2.15B
- 2289000.00K
7.80B
-
8.87B
8.4B
-
- 68000.00K
- 176000.00K
- 80000.00K
-
- 51000.00K
-
183.00M
52.00M
- 1000.00K
- 31000.00K
670.00M
701.00M
94.00M
- 43000.00K
51.00M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
SGMS
2023
2024
2025
2026
2027
$38.56
$42.92
$47.77
$53.16
$59.17