What Happened?
Shares of gaming products and services provider Light & Wonder (NASDAQ:LNW) jumped 5.1% in the pre-market session after the company was added to the FTSE All-World Index.
This inclusion meant that investment funds and exchange-traded funds (ETFs) that track the global index needed to purchase the company's shares to reflect the index's new composition. Such actions typically increase demand for a stock, which can lead to a rise in its price. The addition to the well-known index signaled broader market recognition for the company. In a separate development on the same day, the company's options were delisted.
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What Is The Market Telling Us
Light & Wonder’s shares are very volatile and have had 20 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 7 days ago when the stock gained 8.6% on the news that 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.
Light & Wonder is up 6.5% since the beginning of the year, but at $90.91 per share, it is still trading 18.5% 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 $2,659.
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