After a few strong runs last year, some ASX 200 shares have given back a chunk of their gains. For those who missed earlier rallies, this pullback could offer a second chance.
Recent weakness appears to reflect softer market sentiment rather than a shift in business fundamentals. If the company’s growth outlook remains unchanged, lower prices may present an attractive entry point.
Here are 3 names that have sold off recently but could offer upside if conditions improve.
Aristocrat Leisure Ltd (ASX: ALL)
The Aristocrat share price has dropped about 6% over the past week. It is currently around $49.92, down 1.46% today.
The gaming technology group earns revenue from land-based gaming machines as well as digital and online content. While recent results disappointed some investors, the company continues to generate solid cash flow and operates across global markets.
Broker commentary remains positive. Bell Potter recently highlighted the strength of its core land-based business and ongoing digital growth. Several broker price targets sit well above the current share price, suggesting upside potential over the next year if earnings recover.
However, there are risks. Gaming activity can slow during weaker economic periods, and regulatory changes can weigh on performance. If earnings stabilise, the current valuation may look more compelling.
Light & Wonder Inc (ASX: LNW)
Light & Wonder shares have fallen about 14% over the past week. Although the stock is slightly higher today at $141.35, it remains well below recent levels.
The company operates across gaming machines, digital gaming content, and social casino platforms. This mix of revenue streams can help reduce reliance on any one segment.
On another positive note, a recent legal dispute has now been resolved, removing uncertainty that had weighed on the share price.
Some analysts believe the recent sell-off may have been excessive. If earnings growth continues and margins hold steady, the shares could recover. Although competition in global gaming markets remains strong, and volatility is likely to continue.
Life360 Inc (ASX: 360)
Life360 shares have fallen around 10% in the past week. The stock is modestly higher today at $24.13.
The company operates a family safety and location platform used by millions worldwide. It generates revenue mainly through subscriptions and is working to increase average revenue per user over time.
The share price has been volatile, reflecting broader weakness across technology stocks. Recent updates, however, showed continued user growth and improving earnings.
Some brokers remain positive, pointing to the expanding subscription base and improving margins. If the company continues converting free users into paying customers, revenue growth could stay solid.
But keep in mind, sentiment can shift quickly. Investors should be prepared for sharp moves in either direction.
The post 3 out of favour ASX 200 shares that could be worth a look today appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360 and Light & Wonder Inc. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool Australia has recommended Light & Wonder Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.