Light & Wonder, Inc. (NASDAQ:LNW), might not be a large cap stock, but it saw a decent share price growth of 16% on the NASDAQGS over the last few months. The company is now trading at yearly-high levels following the recent surge in its share price. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock's share price. However, what if the stock is still a bargain? Let's examine Light & Wonder's valuation and outlook in more detail to determine if there's still a bargain opportunity.
What Is Light & Wonder Worth?
Good news, investors! Light & Wonder is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is $127.67, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Light & Wonder's share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Light & Wonder?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to more than double over the next couple of years, the future seems bright for Light & Wonder. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? Since LNW is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you've been keeping an eye on LNW for a while, now might be the time to make a leap. Its prosperous future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy LNW. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, Light & Wonder has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.
If you are no longer interested in Light & Wonder, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
