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Light & Wonder Inc (LNW)

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Question asked 23/01/2026

Light & Wonder Inc (LNW)

Finalisation (and full admission of guilt) of copyright imfringement with Aristocrat. Even parking the view that management have effectively acknowledged questionable ethics to defend illegal activity, how in heck does the market increase the share price by 15%? Sure, uncertainty hanging over their business now resolved - but goodness - they have to pay close to 6 months of profits to settle and then have their ongoing business crimped by withdrawing two key products. Am I missing something or is this reflective of dumb market sentiment? Not urgent. david

Answer

Hi David,

We think you answered the question yourself, the outcome not being “too bad” led to a relief rally. Overall, the size of the settlement was better than many feared even though it also led to the end of commercialisation of Dragon Train and Jewel of the Dragon Games – but that was always going to happen given LNW had already conceded they had used ALL’s IP – their defense being that it was publicly available.

We briefly considered switching our LNW position to ALL following the outcome, but the valuation numbers didn’t stack up.

Light & Wonder (LNW): is trading on 16.9x CY25 earnings (EBTIDA)
Aristocrat (ALL): is trading on 21x FY26 earnings (EBITDA)

We think these stocks can hold the same multiple in time, implying LNW has more upside than ALL.

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Light & Wonder (LNW) v Aristocrat (ALL)

LAST UPDATED 23/01/2026 13:21

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