A month has gone by since the last earnings report for Light & Wonder (LNW). Shares have added about 5.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Light & Wonder due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Light & Wonder Q2 Earnings Top on Solid Revenue Growth

Light & Wonder reported solid second-quarter 2024 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate. The Las Vegas-based cross-platform games and entertainment company reported 8th consecutive quarter of double-digit revenue growth, which exemplified its portfolio strength and resilient business model.

Bottom Line

Net income in the reported quarter was $82 million or 90 cents per share, against a net loss of $1 million or a loss of a penny per share in the year-ago quarter, primarily driven by top-line growth. Non-GAAP net income was $1.42 per share, which beat the Zacks Consensus Estimate by 38 cents.

Revenues

Total revenues in the second quarter of 2024 rose to $818 million from $731 million in the prior-year quarter, propelled by growth in all business verticals. The top line beat the consensus estimate of $806 million. Services revenues increased to $526 million from $496 million in the year-ago quarter, while product sales were $292 million, up from $235 million in the year-ago quarter. This is the 13th consecutive quarter of consolidated revenue growth for the company.

Gaming revenues were $539 million, up 14% year over year, driven by sales growth of gaming machines and healthy demand trends in gaming operations and gaming systems. Revenues from SciPlay surged to $205 million from $190 million in the year-ago quarter. The year-over-year increase of 8% was mainly fueled by the core social casino business. The average revenue per daily active user increased to a record-high tally of $1.04 in the quarter, up 12% year over year. Greater engagement and monetization for players enhanced the top line from this segment. iGaming revenues increased to $74 million, up 6% from the year-ago quarter, driven by growth in North America.

Other Details

Non-GAAP consolidated AEBITDA was $330 million compared with $281 million in the year-ago quarter, with revenue growth and sustained margin strength across all businesses. AEBITDA margin rose to 40% from 38% in the year-earlier quarter.

Cash Flow & Liquidity

For the first six months of 2024, the company generated $312 million of cash from operating activities compared with $219 million in the year-ago period. As of Jun 30, 2024, it had $321 million in cash and cash equivalents with $3,849 million of long-term debt.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

The consensus estimate has shifted 5.97% due to these changes.

VGM Scores

Currently, Light & Wonder has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Light & Wonder has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Light & Wonder is part of the Zacks Gaming industry. Over the past month, Boyd Gaming (BYD), a stock from the same industry, has gained 5.9%. The company reported its results for the quarter ended June 2024 more than a month ago.

Boyd reported revenues of $967.51 million in the last reported quarter, representing a year-over-year change of +5.5%. EPS of $1.58 for the same period compares with $1.58 a year ago.

Boyd is expected to post earnings of $1.40 per share for the current quarter, representing a year-over-year change of +2.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.4%.

Boyd has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.

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