Gaming equipment and services group Light & Wonder has outlined ambitious growth strategies aimed at achieving $2 billion in adjusted EBITDA by 2028, representing a 13 percent three-year compound annual growth rate from its 2025 target of $1.4 billion.
The gaming technology company presented these plans during its recent Investor Day event, where executives detailed a multi-faceted approach to expansion across its gaming, social casino, and iGaming segments.
Despite Light & Wonder’s stock being classified as having a ‘premium to peer valuation,’ analysts Carlo Santarelli and Steven Pizzella from Deutsche Bank maintain a Hold rating.
They noted that the company’s 2028 target exceeds the current Bloomberg Consensus estimate of approximately $1.74 billion. However, this discrepancy may be partially explained by the recent acquisition of Grover Gaming, which is expected to contribute approximately $111 million in adjusted EBITDA.
A central component of Light & Wonder’s growth strategy involves significantly increasing its North American premium install base and global game sales market share by approximately 400 basis points from 2024 to 2028. This initiative falls under the gaming segment, which accounted for about 65 percent of the company’s 2024 gaming revenue.
The company also reaffirmed its 2025 adjusted EBITDA target of $1.4 billion, though Deutsche Bank analysts highlighted that achieving this goal would require approximately 13 percent growth in adjusted EBITDA for the remainder of 2025. This comes after Light & Wonder reported two consecutive quarters with net revenue growth below 4 percent.
From a valuation perspective, based on current market capitalization, first quarter 2025 period-end net debt, plus the recently announced $800 million term loan to finance the Grover acquisition, leaves shares trading at approximately 5.9 times the target 2028 adjusted EBITDA.
Beyond its core gaming business, Light & Wonder outlined growth strategies for its SciPlay division, which represents approximately 26 percent of 2024 gaming revenue. These plans include growing current games above market rates, increasing direct-to-consumer business to approximately 30 percent of revenue by 2028 (up from 11 percent in 2024), and enhancing user acquisition efficiency.
For its iGaming segment, which accounts for roughly 9 percent of 2024 gaming revenue, Light & Wonder aims to increase first-party content share by approximately 300 basis points to over 10 percent by 2028, while also expanding into new markets and increasing omni-channel opportunities.
The Grover Gaming acquisition is expected to contribute to growth through increased device deployment, expanded revenue per device, entry into new jurisdictions including Maryland, Minnesota, and Indiana, and by combining Light & Wonder’s gaming content with Grover’s operating model.
Light & Wonder expects to scale adjusted EBITDA faster than revenue while targeting approximately 17 percent of revenue for R&D and capital expenditure investments.
