Category: Stock Market

Jewellery retailer Michael Hill International Ltd (ASX: MHJ) recently delivered a solid profit result for the first half, sending its shares to a fresh 12-month high.

But the team at Jarden has run the ruler over the results and thinks that if the company continues to execute well, the shares could lock in even more gains.

Solid earnings increase

Firstly, let’s look at the profit result. Michael Hill reported group sales of $371 million, up 3% on the previous corresponding period, but comparable EBIT was up 28.6% to $31 million. Net profit was up 32% to $22.3 million.

The company’s gross margin was steady at 61.2%, with increases in the gold and silver price offset by “overall product mix and focused promotional activity”.

And the company’s net cash position was $20.7 million, $30.5 million better than for the previous period.

Michael Hill did not declare a dividend but indicated that the board did intend to pay a full-year dividend, “subject to current trading conditions continuing and in line with the company’s dividend policy”.

And, encouragingly, same-store sales for the group for the first eight weeks of the current half were up 6% on the previous corresponding period.

Michael Hill Chief Executive Officer Jonathan Wecker said regarding the results:

Since joining the business in August, I have spent most of my time in stores and with our teams and customers. The feedback was consistent, that when we simplify how we operate, stay close to the customer and focus on retail fundamentals, performance improves. Over the half, we acted on that by tightening our product focus, improving our go-to-market, clarifying expectations in stores, and improving how we communicate across our teams. Momentum built through the Christmas trading period, and we saw that come through in stronger sales and improved comparable EBIT. This consistent customer-centric focus has also delivered organic growth across the network, resulting in a broader customer base choosing Michael Hill. Pleasingly, positive sales performance has continued into the first eight weeks of the second half, with group same store sales up 6%.

Shares looking cheap

The Jarden team analysed the first-half results for the ASX retail company and said the uptick in same-store sales was a sign of a shift in momentum.

They added:

The improvement in sales momentum is now evident across multiple periods in all markets and is an encouraging sign of: 1) a healthier operating backdrop; and 2) the brand refresh ⁄ product innovations resonating with customers.

Jarden said they had increased their forecast for full-year earnings at Michael Hill by 21%, “driven by better-than-expected contributions in Canada and Australia”.

Jarden has lifted its 12-month price target on the shares from NZ$0.70 to NZ$0.80, which would be a 50.3% return including expected dividends.

Michael Hill’s Australian shares were last trading at 46 cents, not far off their 12-month high of 47.5 cents.

The post This ASX retailer, trading near its 12-month highs, could add another 50% Jarden says appeared first on The Motley Fool Australia.

More reading

• Michael Hill shares hit 12-month high after first-half profit jump
• 35 ASX All Ords shares with ex-dividend dates next week

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Neuren Pharmaceuticals Ltd (ASX: NEU) shares are under pressure on Tuesday.

In morning trade, the ASX 200 stock is down over 6% to $12.89.

Why is this ASX 200 stock under pressure?

This morning, Neuren advised that its partner, Acadia Pharmaceuticals (NASDAQ: ACAD), has confirmed that it plans to request re-examination of the opinion adopted by the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA).

This is in relation to the marketing authorisation application for trofinetide for the treatment of Rett syndrome in patients two years of age and older.

Neuren also confirmed that, as was anticipated, the previously announced CHMP trend vote was confirmed in a formal vote, blocking its immediate approval.

Trofinetide is approved in the United States, Canada and Israel, where it represents the first and only treatment approved for Rett syndrome.

Acadia’s CEO, Catherine Owen Adams, commented:

While we are disappointed by the CHMP’s recommendation to refuse approval, we continue to be encouraged by the meaningful benefits trofinetide has demonstrated for people living with Rett syndrome. The strong engagement and positive feedback we have seen from patients, caregivers, and clinicians in the Rett community reinforce our belief in the treatment’s clinical value. We remain committed to working constructively with EU regulators to explore next steps and to bring this therapy to patients.

Why was approval denied?

The ASX 200 stock highlights that while the pivotal LAVENDER clinical trial successfully met its co-primary and key secondary endpoints, the CHMP issued a refusal based on perceived deficits.

This includes the treatment effect observed with trofinetide after 12 weeks, while measurable, was viewed as limited in magnitude. It also notes that the study did not capture all core symptoms of Rett syndrome and that assessment of longer‑term outcomes was influenced by patient discontinuations over time.

Acadia believes this feedback provides important information as it considers the intended re-examination.

Commenting on the news, the ASX 200 stock’s CEO, Jon Pilcher, said:

Neuren fully supports a re-examination of the CHMP opinion. Trofinetide has been making a difference for patients for nearly three years in approved markets and the unmet medical need in Europe remains substantial and urgent.

Following today’s weakness, the Neuren share price is now down by a disappointing 30% since the start of the year. However, it is trading relatively flat on an annual basis.

The post Why is this ASX 200 stock sinking 6% today? appeared first on The Motley Fool Australia.

More reading

• Neuren shares dip after FY25 result. Here’s what stood out
• Neuren Pharmaceuticals earnings: Profits up, pipeline builds in 2025
• Why Neuren shares are jumping more than 6% today
• Neuren Pharmaceuticals shares paused ahead of company announcement
• These 2 ASX healthcare shares could jump well over 80%

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investigator Silver Ltd (ASX: IVR) will raise $55 million via the issuance of new equity to accelerate work on its Paris silver project in western South Australia.

The company said in a statement to the ASX on Tuesday that it was in a “very strong” position, with a clear development pathway for Paris, and that it released a definitive feasibility study (DFS) for Paris last week.

Investigator said it had received firm commitments to raise the money at 8.6 cents per share, with its largest shareholder, Jupiter Asset Management, taking part in the raise.

Work to forge ahead

The ASX silver company said following the release of the DFS, its priority was to maintain momentum “and transition immediately from study phase into execution”.

Investigator added:

With an estimated development funding requirement of approximately $260 million for Paris, the company considered it important to secure funding at this stage to remove near-term financing uncertainty and enable an accelerated execution program. The placement strengthens Investigator’s balance sheet and supports early, schedule-critical activities that position Paris for a construction decision and accelerate the pathway to first silver.

The DFS indicated that the project would pay itself back in just 11 months, generating strong cash flow from an open-pit mine using contract mining operators.

The 11-month payback was calculated using a spot price for silver of US$80 per ounce, while the current spot price is US$93.48.

Investigator said every US$1 increase in the spot price would translate into a $42 million increase in life of mine cash flows.

Strong silver price a boon

Investigator Managing Director Lachlan Wallace said the DFS confirmed the project as a “financeable and buildable project”, bolstered by high margins, impressive economics, and a rapid payback period.

He added:

Since the DFS release, silver has traded above the $US80 per ounce spot case used in the study, reinforcing the strength of the silver price at a time when international demand continues to strengthen and the lack of near-term silver mines coming online demonstrates the need for high-quality projects like Paris to fill the growing gap in supply. Securing this $55 million placement allows us to keep momentum at Paris and along with the completion of the DFS, marks a key step change in focus as Investigator move straight into execution phase.

Mr Wallace said the company would now strengthen its delivery team, focus on early execution activities, and progress long lead time procurement planning.

There would also be more targeted drilling in the initial mining areas “to strengthen lender confidence through the debt repayment period and support more attractive financing terms”, he said.

Investigator shares were 19.2% lower at 9.7 cents in early trade.

The post Which ASX silver company is raising $55 million to progress its mining plans? appeared first on The Motley Fool Australia.

More reading

• This major new silver project will pay itself back in under a year its proponents say
• What’s the outlook for the silver price?

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Jupiter Fund Management Plc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX All Ords gold stock Ausgold Ltd (ASX: AUC) is slipping today.

Ausgold shares closed yesterday trading for $1.160. In early morning trade on Tuesday, shares are swapping hands for $1.155 apiece, down 0.4%.

For some context, the All Ordinaries Index (ASX: XAO) is down 0.3% at this same time.

Despite today’s modest dip, the Ausgold share price is up a whopping 145.7% over 12 months, racing ahead of the 10.8% one-year gains posted by the All Ords.

Now, here’s what’s grabbing investor interest today.

ASX All Ords gold stock expanding its drill campaign

This morning, Ausgold reported on a promising new batch of exploratory drill results.

The ASX All Ords gold stock has been actively drilling at its 100%-owned Katanning Gold Project, located in Western Australia.

The latest assay results from the ongoing drilling program stem from another 79 reverse circulation (RC) drill holes totalling 11,369 metres from the Central and Southern Zones of the project.

Ausgold said it hit broad and high-grade intercepts from the resource extension and infill drilling campaign.

Top results included 14 metres at 3.91 grams of gold per tonne from 41 metres, including 9 metres at 5.42g/t from 45 metres.

The ASX All Ords gold stock also revealed that metallurgical diamond drilling within the early mine schedule confirmed locally higher grades than previously interpreted.

Among those top results, Ausgold reported 8.0 metres at 9.54g/t from 90 metres, including 5.8 metres at 13.15g/t from 90 metres.

Ausgold has now completed 33,588 metres of drilling at Katanning, encompassing 232 holes. The miner is still waiting for the results from around 12,000 metres of that program. On the heels of this success, management said the program has been expanded to 54,000 metres.

The company currently has four rigs (three RC and one diamond) operating at the project. An additional diamond rig is expected to arrive on site shortly.

What did management say?

Commenting on the results reported by the ASX All Ords gold stock today, Ausgold executive chairman John Dorward said, “These latest results from the Central and Southern Zones continue to reinforce the scale and continuity of the mineralised system at the Katanning Gold Project.”

Dorward added:

The decision to expand the program to 54,000 metres reflects our confidence in the opportunity in front of us. With an additional diamond rig now mobilising to site – increasing the total to five rigs – and multiple growth fronts now active across Jinkas, Jackson, White Dam and Datatine, we are deliberately accelerating drilling to unlock further Resource growth.

The post Up 146% in a year, ASX All Ords gold stock reports new ‘high grade intercepts’ appeared first on The Motley Fool Australia.

More reading

• Up 123% in a year, ASX All Ords gold stock lifting off again today on ‘landmark’ agreement

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If retirees are looking for an ASX blue-chip share to own in their portfolio for stability and strength, then Wesfarmers Ltd (ASX: WES) shares are a great pick for a few different reasons.

Wesfarmers is the name behind a number of leading retailers, including Bunnings, Kmart, Officeworks, and Priceline.

The business recently reported its FY26 half-year result, which included multiple positives that should be very appealing to retirees.

Ongoing dividend growth

One of the things retirees may be most interested in is the passive income the business pays. That’s what may pay for life’s expenses, after all.

Wesfarmers’ board of directors decided to increase the interim dividend per share by 7.4% with the HY26 report, which is considerably stronger than inflation and Wesfarmers’ revenue growth.

The company generally tries to increase its payout alongside the net profit growth. Wesfarmers mentioned that its dividend is determined by available franking credits, current earnings, cash flows, future cash flow requirements, and targeted credit metrics.

Of course, there’s much more to the appeal of a business than just the passive income for retirees. But the company’s dividend growth looks positive. The forecast on CommSec suggests it could deliver an annual dividend per share of $2.16 in FY26, which would be a grossed-up dividend yield of 3.9%, including franking credits.

I’m expecting passive income growth to continue over the rest of the decade.

Strength of the retail businesses

The most important thing, in my eyes, is the financial performance of the business.

By some distance, the two most important divisions for the company are Bunnings Group and Kmart Group. While neither delivered huge growth, the numbers reported by both were very solid.

Bunnings Group revenue rose 4% and earnings increased 5%. Kmart Group revenue increased 3.2%, with earnings climbing 6.1% to $683 million.

Both businesses are benefiting from their leadership in their respective retail market segments, giving them pricing power and scale advantages to offer customers the lowest-cost items.

For Bunnings, it said sales grew across all product categories, regions, and customer segments. Kmart was “disciplined” with its pricing and inventory management in a competitive environment.

I’m also excited about the potential for Anko – Kmart’s own brand of great-value products – to expand the store network in the Philippines from the single digits to something much bigger.

Rising profit margins

Not only is Wesfarmers’ revenue climbing, but its earnings are growing faster thanks to steady improvements in its profit margins.

While revenue increased by 3.1% to $24.2 billion, the business also saw operating profit (EBIT) grow 8.4% to $2.5 billion and net profit after tax (NPAT) grow 9.3% to $1.6 billion.

When margins improve like that, it can lead to the bottom line growing faster than the top line (revenue). Usually, it’s the net profit that investors value a business on. So, you can see how the rising profit margins can play an important role in shareholder returns.

Another sign of the company’s improving quality for (retiree) shareholders was that the underlying return on equity (ROE) improved by 1.5 percentage points to 32.7%. This shows that the business is making a high level of profit on the shareholder money retained within the business. And the metric continues to improve.

With the Wesfarmers share price down 10% since 18 February (at the time of writing), this seems like a good time to invest.

The post Why Wesfarmers shares are a retiree’s dream in 2026 appeared first on The Motley Fool Australia.

More reading

• 5 top ASX 200 shares I’d buy in March
• What are analysts saying about CAR, Wesfarmers, and Xero shares?
• 3 of the best blue chip ASX shares I’d buy in March
• 3 ASX ETFs for a stress-free start to investing
• The one question I always ask before buying an ASX share

Motley Fool contributor Tristan Harrison 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 Wesfarmers. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Life360 Inc (ASX: 360) shares are on the move on Tuesday morning.

At the time of writing, the family safety technology company’s shares are up 15% to $28.45.

Why are Life360 shares jumping?

Investors have been buying the company’s shares this morning after it released its fourth quarter and full-year results.

According to the release, Life360 delivered a 26% increase in revenue to US$146 million for the three months. This reflects a 30% jump in total subscription revenue to US$102.5 million.

This led to Life360 ending the period with record annualised monthly revenue (AMR) of US$478 million, which is up 30% on the prior corresponding period.

Also growing strongly was its adjusted EBITDA, which lifted 53% to US$32.4 million in the fourth quarter. For FY 2025, adjusted EBITDA was up 19% to a record of US$93.2 million.

What were the drivers of this strong result?

Management advised that this was driven by record-breaking results across key metrics, including monthly active users (MAU), paying circles, and global net additions.

MAUs reached approximately 95.8 million in FY 2025, up 20% year-on-year. Paying circles increased by 576,000 to reach a total of 2.8 million.

Commenting on the year, Life360’s CEO, Lauren Antonoff, said:

2025 was a landmark year for Life360. For the first time in company history, we achieved annual net income, reflecting both the fundamental strength of our freemium model and the operating discipline we’ve built over the past several years. We exited the year with 95.8 million monthly active users, 2.8 million Paying Circles with record annual net additions, full-year revenue growth of 32%, and 105% growth of Adjusted EBITDA.

AI adoption

Antonoff also revealed how artificial intelligence (AI) is changing Life360 for the better. She shared:

We are deep into the transition to become an AI-first company. Organization-wide active AI adoption has grown to over 95%, accelerating our execution and expanding what’s possible for families on our platform. We see AI as an opportunity to accelerate our path and deepen our moat. Our core use case is durable because it is anchored in real people moving through the physical world, generating data that further deepens our advantage.

Outlook

Life360 has reiterated its guidance for FY 2026. It continues to expect MAU growth of 20% and consolidated revenue of US$640 million to US$680 million, which represents 31% to 39% growth, and adjusted EBITDA of US$128 million to US$138 million.

Antonoff also spoke about Life360’s longer term aspirations. She said:

These accomplishments bring us closer to achieving our strategic goals of surpassing 150 million MAU and $1 billion in annual revenue, delivering consistent Adjusted EBITDA margin expansion on our path to above 35%.

The post Why are Life360 shares jumping 15% today? appeared first on The Motley Fool Australia.

More reading

• Buy this ASX tech share now and hold it for 10 years
• Life360 FY25 earnings: revenue jumps, positive outlook for FY26
• Where to invest $20,000 in ASX growth shares this month
• Fund manager reveals views on Life360, Catapult, and Xero shares amid tech turmoil
• 3 unmissable Aussie stocks to buy before they pop

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Austral Resources Australia Ltd (ASX: AR1) is deeply undervalued according to the team at Shaw and Partners, which said in a recent report that they believe the stock could more than quadruple.

So where do they get this confidence from?

Company reset succeeds

Austral has been pretty active of late, releasing its full-year profit report, but also acquiring a copper deposit outright from Glencore and raising a tranche of money, which will leave the company debt-free and cashed up to focus on production.

So let’s go through these in sequence.

Firstly, the company announced last week that it had made a net profit for the year of $11.9 million, up from a loss of $22.6 million the previous year.

Australia chair David Newling said it was a turning point for the company.

These results are the outcome of a long period of hard work and perseverance by the company’s employees, contractors and stakeholders. Following the re-quotation of the company’s securities on the ASX in early November 2025, it is extremely pleasing to report to our loyal shareholders that our revised strategy has enabled a financial reset of the company. Looking forward, and acknowledging our recent $65m placement in February 2026, the company is fully funded and ready to accelerate its production, production capability and exploration potential. Given the copper industry’s positive tailwinds, we find ourselves very well positioned to achieve our vision of becoming Australia’s next mid-tier copper powerhouse.

Regarding the capital raise, the company is raising $65 million at 9 cents per share, with $15 million coming from the Queensland Government’s Critical Minerals and Battery Technology Fund.

The money will be used to accelerate copper production at the company’s Rocklands and Mt Kelly mines, and to fund exploration at the Lady Annie pit extension.

Once the capital raise is complete, the company will be debt-free with $97 million in cash.

The company also said it was acquiring the Lady Loretta deposit from Glencore, in an announcement made in mid-February.

Shares looking cheap

Shaw and Partners has looked at this sequence of events and said in a note to clients that the ASX copper company has made the transition from a debt-laden junior mining company in a long-term suspension from trade, “to a well-capitalised producer with enormous growth potential”.  

The Shaw team added:

Austral is targeting production 50kt of copper per annum by late 2027. This will be achieved through a dual strategy focusing on resource development and exploration, particularly at Lady Loretta and Mount Clark/Flying Horse, as well as M&A and regional consolidation. Austral is positioning Rocklands as a critical regional processing hub, leveraging the fact that it is the only facility in NW QLD with excess third-party capacity.

Shaw said the company was also looking to process ore for third parties, targeting 70% of their own ore and 30% external ore, with a refurbishment of its Rocklands production facility expected to be finished by mid-2027.

Shaw has a price target of 42 cents on Austral shares, which would be a huge 356.5% return if achieved.

The post This ASX copper producer could more than quadruple in value: broker appeared first on The Motley Fool Australia.

More reading

• Up 146% in a year, ASX All Ords gold stock reports new ‘high grade intercepts’
• Why Wesfarmers shares are a retiree’s dream in 2026
• Why are Life360 shares jumping 15% today?
• Buy this ASX tech share now and hold it for 10 years
• Can this beaten-down ASX 200 stock bounce back in 2026?

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If there’s one S&P/ASX 200 Index (ASX: XJO) share that has captured the imagination of growth investors in recent years, it’s Life360 Inc (ASX:360).

But after a period of sharp losses for the ASX tech share, investors are asking the obvious question: can the growth story keep running?

True tech script

Once known primarily as a family-tracking app, the ASX tech share has evolved into a global digital safety platform built on subscriptions, data insights, and advertising. Life360 now positions itself as a broader ecosystem play, connecting families through location sharing, crash detection, identity protection, and emergency assistance services.

True to the tech script, Life360’s share price has delivered big moves in both directions. Over the past 6 months, the ASX tech share stock has fallen 44%, pulling its market capitalisation back to roughly $6 billion. The start of 2026 has also been shaky, with the shares down close to 23% year to date at $24.72 at the time of writing.

Share price explosion

That said, context matters. Over the past five years, the ASX 200 tech share has surged more than 450%, rewarding long-term holders who backed the platform’s global expansion and subscription push early on. The recent pullback reflects valuation compression and shifting risk appetite rather than a collapse in the underlying business.

Operationally, the company continues to execute. Monthly active users have climbed toward 100 million globally, providing a vast funnel for subscription upgrades. Paid circles — its core subscription product — continues to grow, driving higher recurring revenue and improving operating leverage.

Layering ads to subscriptions

Management has also sharpened its focus on monetising free users through advertising and data partnerships. That monetisation strategy has accelerated through acquisitions and integrations. The Nativo deal, in particular, expands Life360’s higher-margin advertising capability.

By layering ads on top of subscriptions, the company aims to diversify revenue and lift average revenue per user without relying solely on subscriber growth.

Still, risks remain. Life360 pays no dividend, reflecting its growth-first strategy. Profitability has improved, but the model depends on sustained subscription growth and effective monetisation of non-paying users.

Advertising and data initiatives offer upside, yet they also invite privacy scrutiny and competition from larger technology players.

What next for the ASX tech share?

Analyst sentiment remains broadly constructive despite the share price weakness. Consensus forecasts compiled by TradingView lean toward a buy rating for the ASX tech share, with average 12-month price targets of $42.80, implying significant upside from current levels.

Some forecasts point to potential upside of 70% to nearly 100% if the company delivers on its growth plans.

Bell Potter recently reiterated a buy rating and set a $45 price target. This points to an 82% upside at current price levels.

The broker highlighted strong growth in paying circles and expects further conversion of monthly active users into subscribers. It also sees expansion into adjacent safety and advertising markets as a meaningful long-term driver.

The post Buy this ASX tech share now and hold it for 10 years appeared first on The Motley Fool Australia.

More reading

• Why are Life360 shares jumping 15% today?
• Life360 FY25 earnings: revenue jumps, positive outlook for FY26
• Where to invest $20,000 in ASX growth shares this month
• Fund manager reveals views on Life360, Catapult, and Xero shares amid tech turmoil
• 3 unmissable Aussie stocks to buy before they pop

Motley Fool contributor Marc Van Dinther 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. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This S&P/ASX 200 Index (ASX: XJO) stock has had a choppy start to 2026, giving back some of the strong gains it delivered over the past couple of years.

After climbing to record levels late in 2025, Light & Wonder Inc. (ASX: LNW) has seen its stock pull back almost 20% year to date. The ASX 200 gaming stock started the trading week with another loss of 7% to $124.85 at the time of writing.

The pullback suggests investors are balancing valuation concerns and market volatility against otherwise solid operating results. Let’s have a closer look.

Diversified gaming model

Light & Wonder operates across three core segments: land-based gaming, iGaming, and social gaming through its SciPlay division.

The ASX 200 stock supplies slot machines, gaming cabinets and casino systems to physical venues around the world, while also developing and distributing digital casino content.

This diversified model allows Light & Wonder to capture revenue from traditional casino floors as well as the fast-growing digital gaming market.

Substantial share buybacks

Financially, the business has continued to deliver growth. In its latest full-year results, Light & Wonder reported revenue of US$3.314 billion, alongside an 18% lift in adjusted net profit to US$567 million.

Earnings per share rose strongly and free cash flow jumped more than 40% year on year. The ASX 200 stock used that cash generation to fund substantial share buybacks, returning hundreds of millions of dollars to shareholders.

Recurring revenue, digital exposure

A key strength of Light & Wonder is its recurring revenue base. A significant portion of revenue comes from installed gaming machines and ongoing content agreements. This provides a more stable earnings profile than one-off equipment sales alone.

Its growing digital exposure also gives it a foothold in markets where online gaming is expanding rapidly. Strong cash flow generation further enhances flexibility, enabling debt reduction or additional returns for the ASX 200 stock shareholders over time.

Meaningful debt, legal risks

However, risks remain. The company carries a meaningful debt load following past acquisitions and corporate restructuring. And while manageable, leverage is something investors continue to monitor.

As a global gaming operator, Light & Wonder also faces regulatory and legal risks across multiple jurisdictions. Changes to gaming laws, tax rates or compliance requirements could affect profitability.

In addition, not all segments of the company perform evenly, with some variability in growth rates across divisions.

What next for the ASX 200 stock?

Analyst sentiment appears optimistic, with most market watchers rating the ASX 200 stock a strong buy. Earnings beats have reinforced confidence in management’s execution, but some market watchers remain mindful of valuation levels and revenue consistency.

After a strong multi-year run, the ASX 200 stock’s recent pullback may reflect a reset in expectations rather than a deterioration in fundamentals. The key question for 2026 is whether continued earnings expansion will be enough to reignite share price momentum after its recent stumble.

In February 2026, RBC Capital initiated coverage with an outperform rating. The broker set a 12-month price target of $190, implying 52% upside from current levels.

The post Can this beaten-down ASX 200 stock bounce back in 2026? appeared first on The Motley Fool Australia.

More reading

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• Light & Wonder FY25 profit rises on Gaming and iGaming strength

Motley Fool contributor Marc Van Dinther 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 Light & Wonder Inc. 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.

Following earnings season, two ASX small-caps have received positive outlooks from the team at Morgans. 

Based on current prices, and the projections from Morgans, these small-cap companies could rise roughly 60%. 

While ASX small-caps come with increased volatility, there can also be increased upside.

Here’s are two that could be worth monitoring.

Eureka Group Holdings Ltd (ASX: EGH)

Eureka Group Holdings Ltd provides rental accommodation for seniors and disability pensioners in safe and well-managed environments.

Year to date, its share price has risen 10.4%.

The company recently released H1 FY26 results.

According to Morgans, the small-caps reaffirmed FY26 guidance will see EBITDA grow 20%-25% (vs pcp) and Underlying EPS grow 7.5%-10%.

This is a result of a 5%-7% same-store rent growth and full earnings contributions from the $80m of assets acquired since CY25. 

In EGH we see sector leading earnings growth, Government backed revenues, and attractive valuation (trading at NTA). The return outlook, relative to risk, remains attractive as the secure income stream and valuation discount mitigates some of the risks, whilst the modest market cap means acquisitions can materially improve earnings.

Based on this guidance, the broker maintained its buy recommendation and $0.85 price target.

From yesterday’s closing price of $0.53, that indicates a 60% upside. 

Betr Entertainment Ltd (ASX: BBT)

The company provides sports and race betting services in Australia. Its main product lines include sports, horse racing, greyhound racing, harness racing, and on-track wagering.

It is aiming to expand its services into the US market as more US states change their legislation to permit legal access to online wagering services.

In 2026, its stock price has risen by approximately 16.6%.

It also reported 1H FY26 results during February. 

Following the results, the team at Morgans said the interim result was impacted by an unusually unfavourable trading period for bookmakers, particularly across racing during the peak Spring Carnival. 

While 2Q26 margins were heavily affected by customer-friendly outcomes, trading has normalised since December, and the business enters 2H26 with improved operating leverage following the completion of its major brand and marketing investment phase. Notwithstanding recent earnings pressure, we believe the company’s 2H26 and FY27 guidance is achievable, supported by normalising gross margins, improved promotional efficiency and a more disciplined cost base.

As a result, the broker reduced earnings forecasts across FY26-27F. 

It has maintained a buy recommendation and lowered its price target to $0.40. 

Despite lowering its target price, there remains approximately 63% upside based on yesterday’s closing price of $0.245. 

The post Two exciting small-caps with buy recommendations from Morgans appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Eureka Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.