What Happened?
Shares of gaming products and services provider Light & Wonder (NASDAQ: LNW) jumped 8.6% in the morning session after the company reported third-quarter results that showed significant profit growth, even as revenue slightly missed analyst forecasts. The company's revenue grew 2.9% year-over-year to $841 million, falling just short of expectations. However, the real highlight for investors was its surging profitability. Light & Wonder's operating margin expanded by a notable 7.8 percentage points from the same quarter last year to 27.2%, demonstrating increased efficiency. This operational strength helped the company deliver an adjusted earnings per share of $1.81, which soared 35.8% past Wall Street's estimate of $1.33.
Is now the time to buy Light & Wonder? Access our full analysis report here.
What Is The Market Telling Us
Light & Wonder’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 30 days ago when the stock dropped 3% as a confluence of negative economic data pointed to a weak economy. The latest Survey of Consumer Expectations from the New York Fed revealed that households' short-term inflation expectations rose, while their outlook on the labor market deteriorated. Consumers expressed greater concern about potential job losses and expected lower earnings growth, factors that directly impact discretionary spending. Adding to the unease, Chief Economist at Moody’s Analytics, Mark Zandi, warned that 22 states demonstrated clear signs of a recession, placing the broader U.S. economy in a precarious position. The U.S. government shutdown further dampened sentiment, threatening to weigh on incomes and purchasing power.
Light & Wonder is down 7.6% since the beginning of the year, and at $78.91 per share, it is trading 29.2% below its 52-week high of $111.48 from February 2025. Investors who bought $1,000 worth of Light & Wonder’s shares 5 years ago would now be looking at an investment worth $2,192.
P.S. In tech investing, "Gorillas" are the rare companies that dominate their markets—like Microsoft and Apple did decades ago. Today, the next Gorilla is emerging in AI-powered enterprise software. Access the ticker here in our special report.
