Why Light & Wonder (LNW) is a Top Growth Stock for the Long-Term

Zacks' investment methodology integrates its proprietary Zacks Rank, which has historically seen #1 (Strong Buy) stocks average +23.62% annual returns since 1988, with complementary Zacks Style Scores (Value, Growth, Momentum, and VGM) to refine stock selection. These A-F rated scores help identify stocks with high probability of market outperformance, especially when combined with top Zacks Ranks. Light & Wonder (LNW), a gaming technology firm, is highlighted as a growth prospect; despite a #3 (Hold) Zacks Rank, it boasts 'A' Growth and VGM Style Scores, a recent upward revision of its fiscal 2025 earnings estimate to $5.39/share, and a strong +24.7% average earnings surprise, positioning it for investor consideration.

Analysis

Light & Wonder (LNW) presents a mixed but compelling profile for growth-oriented investors, according to the Zacks investment framework. While the stock currently holds a neutral Zacks Rank #3 (Hold), its underlying metrics signal potential strength. The company scores an 'A' for its Growth Style Score and overall VGM Score, indicating strong fundamentals in these areas. This is supported by a consistent history of outperformance, with an average positive earnings surprise of 24.7%. Although the forecasted year-over-year earnings growth for the current fiscal year is a modest 2.3%, the outlook for fiscal 2025 is improving, evidenced by a recent upward analyst revision that increased the consensus earnings estimate to $5.39 per share. This positive revision, combined with the company's strategic pivot to a cross-platform global games company following the sale of its Lottery Business, suggests that the headline 'Hold' rating may not fully capture its forward-looking potential.

Key Decisions for Investors

• Investors should look beyond the neutral Zacks #3 (Hold) rating and focus on the strong 'A' grade for Growth, which suggests the stock may be an under-the-radar opportunity for a growth-focused portfolio.
• Monitor for further upward revisions to earnings estimates, as the recent positive adjustment to the fiscal 2025 consensus estimate and the significant 24.7% average earnings surprise indicate a potential for continued outperformance.
• Consider the investment as a long-term play based on the company's strategic transition, as the modest 2.3% current-year earnings growth forecast is contrasted by a more promising forward outlook.