International Game Technology (IGT, Financial) has recently inked a multi-year agreement with Red Earth Casino located in Thermal, California. This partnership involves replacing a rival's casino management system with IGT's acclaimed ADVANTAGE CMS. As part of this collaboration, Red Earth Casino will undertake a comprehensive upgrade of its systems hardware, incorporating advanced AVENTO capabilities.
The casino will take advantage of IGT's W2G Accrual and Mobile Responder modules to streamline operations. Additionally, it will utilize M5, IGT's content management platform, which is designed to enhance player engagement. The implementation at Red Earth Casino will integrate IGT's latest systems innovations, including the ADVANTAGE's newly introduced FloorNet architecture. This system features a "message bus" design aimed at boosting performance and uptime. Moreover, IGT SystemWatch will be included for round-the-clock system monitoring.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for International Game Technology PLC (IGT, Financial) is $22.00 with a high estimate of $30.00 and a low estimate of $18.00. The average target implies an upside of 33.98% from the current price of $16.42. More detailed estimate data can be found on the International Game Technology PLC (IGT) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, International Game Technology PLC's (IGT, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for International Game Technology PLC (IGT, Financial) in one year is $15.97, suggesting a downside of 2.74% from the current price of $16.42. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the International Game Technology PLC (IGT) Summary page.
IGT Key Business Developments
Release Date: February 25, 2025
- Revenue: $2.5 billion for the full year 2024, consistent with 2023.
- Free Cash Flow: Approximately $660 million, with over 80% from lottery operations.
- EBITDA: $1.2 billion for the lottery business at a 47% margin.
- Net Debt Leverage: 2.4 times, adjusted for $2 billion in gaming and digital sales proceeds.
- Same Store Sales Growth: 4% increase in Q4 for instant ticket and draw games.
- Q4 Revenue: $651 million, compared to $681 million in the prior year.
- Q4 Income from Continuing Operations: $116 million, up from $73 million in the prior year.
- Adjusted EBITDA for Q4: $290 million, compared to $316 million in the prior year.
- Cash from Operations: Over $1 billion for the full year 2024.
- Shareholder Returns: $161 million in cash dividends paid.
- 2025 Revenue Outlook: $2.55 billion to $2.65 billion.
- 2025 Adjusted EBITDA Outlook: $1.1 billion to $1.15 billion.
- 2025 CapEx: Estimated at $400 million to $450 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- International Game Technology PLC (IGT, Financial) announced the sale of its gaming and digital business for over $4 billion in cash, allowing the company to focus solely on its leading lottery business.
- The lottery business generated over $1 billion in consolidated cash from operations, with $660 million in free cash flow, highlighting its strong cash flow generation.
- IGT achieved $1.2 billion of EBITDA at a 47% margin in the lottery business, showcasing its attractive profit profile.
- The company has a strong track record of securing long-term contracts, including recent wins and extensions in Colorado, Luxembourg, North Carolina, Mississippi, and Virginia.
- IGT's investment in new technologies, such as its iLottery platform and Infinity Print technology, has driven growth and attracted new players, particularly in Italy.
Negative Points
- Revenue for the fourth quarter was $651 million, down from $681 million in the prior year, due to lower US multi-state jackpot sales.
- The company faces variability in financial performance due to the timing of large US multi-state jackpots, which can impact revenue and LMA incentives.
- IGT anticipates a significant capital expenditure cycle in 2025 and 2026, with annual CapEx expected to be between $400 million and $450 million.
- The company is experiencing temporary costs related to contract extensions, cloud-based solutions, and point of sale network optimization, impacting short-term profitability.
- IGT's guidance for 2025 includes a forecasted negative cash flow from operations of $300 million, primarily due to upfront license fees for the Italy Lotto contract.
