Following a robust Q2 beat (AEBITDA +14%), Jonas sees continuing momentum across LNW's businesses ahead of the SciPlay Corporation's (NASDAQ:SCPL) expected deal close in early Q4. 

LNW submitted a proposal in May to acquire the 17% of SciPlay that it did not own for ~$500 million.

Despite industry headwinds, Jonas highlights that SciPlay continues to see sizable growth, and it narrows the monetization gap with peers (ARPDAU is currently ~60% of peer levels). 

The AEBITDA target figure has been highly debated amongst buy-side investors. The analyst notes CEO Matt Wilson has full faith in the target.

Management noted expansion into adjacent markets would be a meaningful contributor to reaching the goal, pointing to upcoming (potential) VLT placements in Oregon and Canada, the analyst adds.

Potential VLT expansion in Chicago and North Carolina could also drive sizable product sales for LNW. When management initially formulated the $1.4 billion target, these markets were not contemplated, the analyst adds.

Jonas thinks LNW is focused on attracting top game design talent to its platform. 

Management highlighted Frankenstein (debuted as the #1 New WAP game) and Dragon Train (seeing great early success in Australia, coming to the U.S. in 1H24) as early wins, the analyst adds. 

The analyst notes that LNW believes they are now in a better position to displace more competitors as they further grow.

Price Action: LNW shares are trading higher by 2.17% to $76.49 on the last check Friday.