LNW
Light & Wonder, Inc.
$99.75
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 27.6% below fair value
You pay
$99.75
Bear
$91.28
Fair
$137.77
Bull
$188.38
Bear
$91.28
-8.5%
9% stage 1 growth, 12% discount
Fair
$137.77
+38.1%
14% stage 1 growth, 12% discount
Bull
$188.38
+88.9%
19% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
38%
Implied Market Multiple
21.2x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $205.00 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $137.77 per share.
Warnings
Wall Street's average price target is $205.00 (from 13 analysts). Our estimate is 41% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions