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Light & Wonder, Inc. (LNW)
Intrinsic Value (DCF)
Current$120.26
→
Intrinsic$26.55
-78%
$5.26$26.55$67.04
Market implies 31% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $120, the market prices in continued strong cash flow growth (31%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $5 → Bull $67. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $39 | $46 | $54 | $63 |
| 10% | $16 | $21 | $27 | $32 |
| 12% | $3 | $7 | $11 | $16 |
| 14% | $0 | $0 | $1 | $5 |
Bull Case
- Bull case ($67) with 10% growth, 9% discount rate
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($5) implies 96% downside at 6% growth, 12% discount
- Price reflects 31% growth expectations vs 8% historical — high bar to clear
- Trading 78% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$365.04M
Year 2$394.24M
Year 3$425.78M
Year 4$459.85M
Year 5$496.63M
Terminal$7.31B
📐 Model Inputs
Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$338.00MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.