BRIGHTSTAR LOTTERY PLC (BRSL): what the price requires
The current priced-in claim for BRIGHTSTAR LOTTERY PLC (BRSL) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/BRSL
Headline
| Field | Value |
|---|---|
| Ticker | BRSL |
| Company | BRIGHTSTAR LOTTERY PLC |
| Current price | $10.88/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Multiple paid | 7x operating income |
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage (computed at the 7% minimum rate; the CAPM rate 5.4% sits below it).
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.52σ |
| cohort percentile (of 33 peers) | 12 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and growth-DCF value, while earnings-power/relative-multiple land below the price. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.14x | 4 | expensive |
| Earnings | 17.55x | 1 | expensive |
| Relative | 2.05x | 1 | expensive |
| Growth | 0.23x | 1 | justifies |
Families that justify the price: Asset, Growth Families that call it expensive: Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 4.5%); the inversion above states its own rate.
Per-Model Detail (n=7)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $0.00 | — | no | Negative/zero FCF — equity value floored at $0 |
| DCF Exit Multiple | Growth | $0.00 | — | no | Negative/zero FCF or EBITDA — equity value floored at $0 |
| Relative Valuation | Relative | $5.32 | 2.05x | yes | P/E 14x (static sector reference · 2026-04), scenarios: 11.7x / 14.0x / 16.3x (bear / base = reference held flat / bull), EV/EBITDA 13.05x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $48.26 | 0.23x | yes | Stage 1: -5% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $8.07 | 1.35x | yes | BV/sh $4.44, ROE (TTM) 16.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $10.73 | 1.01x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $3.56 | 3.06x | no | Rev $2.5B, growth -9% (input: historical growth; tapered), Terminal P/S: 0.7x / 0.9x / 1.0x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $23.87 | 0.46x | no | Normalized EBIT (5y avg op income, one-time charges added back) $0.72B × (1−40%) / WACC 4.5% → EPV (no growth) |
| Residual Income | Asset | $10.82 | 1.01x | yes | BV $4.44 + 5yr PV of (ROE (TTM) 16.8% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $8.60 | 1.27x | yes | √(22.5 × EPS $0.74 × BVPS $4.44) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $0.01 | 1088.00x | yes | EBITDA $0.22B × sector EV/EBITDA 9.0x (excluded from median) |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $0.62 | 17.55x | yes | EPS $0.74 × (8.5 + 2×-4.9%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $25.49 | 0.43x | no | Revenue $2.51B × sector P/S 2.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $8.00 | 1.36x | no | EPS $0.74 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $2.8b |
| Net debt / NOPAT (after-tax) | 8.96x |
| Net debt / operating income (pre-tax) | 4.02x |
| Share count CAGR (buyback) | -1.2% |
| Burning cash | yes |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
At about $11, Brightstar trades near 7 times operating income, a multiple so low it sits below what even a steady mid-single-digit decline in operating profit would justify. The asset-based and growth-DCF methods support the price; the earnings-power and peer-multiple methods are the ones calling it expensive. This reads as a value name, not a growth bet.
The company is a different animal than it was a year ago. It sold its Gaming and Digital business to Apollo affiliates for roughly $4.0 billion net in July 2025, returned more than $1 billion to shareholders, and is now a focused lottery operator anchored by its long-running Italian Lotto position and a U.S. footprint.
The balance sheet is where the caution lives. Net debt sits near $2.8 billion at about 4 times operating income on the trailing figure, and interest coverage is thin, in part because the company funded the upfront fees for its renewed nine-year Italian Lotto license. The dividend is real, at $0.23 a quarter, but so is the leverage.
Bull Case
Frame this as a mature business that just finished reinventing itself, because that stage determines how to read the numbers. Brightstar is the company formerly known as International Game Technology, and in July 2025 it completed the sale of its Gaming and Digital business to affiliates of Apollo Global Management for roughly $4.0 billion of net cash. What remains is the lottery business: running games for government lottery authorities under long, contracted concessions. That is a steadier, more annuity-like business than the slot machines and online gaming it shed, and the transformation is why the trailing financials look noisy while the forward picture is cleaner.
The core asset is the Italian Lotto position, and the company just secured its future. The renewed nine-year Italian Lotto license began December 1, 2025, locking in the single most important contract for the better part of a decade. First-quarter 2026 revenue rose about 1% to $587 million on a 3.1% same-store sales increase in Italy and a favorable U.S. mix, and adjusted EBITDA grew 15% to $287 million, helped by a cost-savings program. Full-year 2026 guidance calls for revenue of $2.50 to $2.55 billion and adjusted EBITDA of $1.16 to $1.19 billion, both ahead of the 2025 figures. A business that is growing EBITDA double digits while its revenue is roughly flat is converting more of each dollar to profit.
The valuation and the capital return are the value-investor's hook. At about 7 times operating income, the price sits below what even a modest decline in profit would warrant, and the asset-based methods (book value plus the present value of returns above the cost of equity) land at or above the current price, reflecting a return on equity around 17%. Management is returning cash directly: more than $1 billion was returned to shareholders around the divestiture, and the quarterly dividend was raised to $0.23, putting over $70 million back to holders in the first quarter alone. The share count is shrinking slightly. If the lottery business simply holds its contracts and converts EBITDA to cash, the combination of a high-single-digit operating multiple and a real, rising dividend is the kind of setup the asset-supported read is built for.
Bear Case
The truth a Brightstar holder would rather not face is concentration: this is now a company whose value rests heavily on a single contract in a single country. The Italian Lotto license is the crown jewel, and the company just paid dearly to keep it. The renewed nine-year license carried total upfront fees of about €2.23 billion, with the final installment of roughly €1.68 billion paid in April 2026. That is a real cash outlay against a balance sheet that already carries meaningful debt, and it concentrates the business's fortunes on the terms, renewal, and regulation of Italian gaming for the next decade. A favorable contract today is a dependency tomorrow, and the price reflects little margin for an adverse renewal or a regulatory change abroad.
The leverage is the second hard fact. Net debt sits near $2.8 billion at roughly 4 times trailing operating income, and the interest coverage on the trailing operating figure is thin, below 1 time on the strict measure the model uses. Funding the Italian license fees pushed the debt and stretched coverage at exactly the moment the company is also paying a dividend and buying back a little stock. The asset-based methods that support the price assume the business keeps earning a high return on equity; a higher-for-longer rate environment or a soft year would squeeze the cash available for both debt service and the distribution, and the dividend is the more discretionary of the two.
Then there is the shrinking top line and the multiple that says it. Revenue has been declining at a high-single-digit rate over the recent window, and the earnings-power and relative-multiple methods both land below the price, signaling that on current, un-grown earnings the stock is not the obvious bargain the headline multiple suggests. The low operating multiple exists for a reason: the market is pricing a business that has divested its growth engine, carries leverage, and depends on government concessions it does not control. The peer group the screen reaches for, live entertainment and media names, is a poor fit for a lottery operator, which is itself a sign of how idiosyncratic and hard-to-comp this business is. Buy the value case and you are underwriting steady contract economics and disciplined deleveraging. If either slips, the asset support is thinner than the low multiple implies.
Valuation
Brightstar prices like a leveraged value name, not a growth story. At about $11 the stock trades near 7 times company-wide operating income, a multiple low enough that the price sits below what even a steady 5%-a-year decline in operating profit would warrant. In other words, the market is already discounting a shrinking business, which sets a low bar: the stock does not need growth to work, it needs the decline to be gentler than the price assumes.
The method families split along the value-versus-earnings line. The asset-based methods are supportive: book value plus the present value of returns above the cost of equity lands in the $8 to $11 range, at or above the price, reflecting a return on equity near 17% on a book value of about $4.44 per share. A long-horizon dividend-discount read lands well above the price. Against that, the relative-valuation method lands near $5 on a sector P/E, and the simple earnings-power reads are lower still, both saying the stock is expensive on current, un-grown earnings. The disagreement is the signal: this is a name the asset and dividend frames like and the static earnings frames do not.
The conclusion is that the price is supported by what the company owns and distributes, not by its current earnings multiple alone. The bet is that the lottery business, anchored by the renewed Italian Lotto license through 2034, holds its contract economics and converts EBITDA to cash steadily enough to service the roughly $2.8 billion of net debt and sustain the $0.23 quarterly dividend. If it does, the low operating multiple and the asset support make the downside look limited. If revenue keeps sliding, the rate environment stays high, or the leverage forces a choice between deleveraging and the dividend, the asset support is thinner than the headline multiple suggests, and the earnings-based methods that call it expensive become the more honest read.
Catalysts
The defining transaction is the portfolio reshaping. Brightstar completed the sale of its Gaming and Digital business to affiliates of Apollo Global Management on July 1, 2025 for roughly $4.0 billion of net cash, then returned more than $1 billion to shareholders and reduced net debt. (PR Newswire) The company that remains is a focused lottery operator, which is the lens for everything that follows.
The first-quarter 2026 print was solid. Revenue rose about 1% to $587 million on a 3.1% same-store sales increase in Italy and a favorable U.S. mix, and adjusted EBITDA grew 15% to $287 million, aided by the OPtiMa cost-savings program. Management reaffirmed full-year 2026 guidance of $2.50 to $2.55 billion in revenue and $1.16 to $1.19 billion in adjusted EBITDA, and declared a $0.23 quarterly dividend. (stocktitan, TipRanks)
The single most important event already landed: the renewed nine-year Italian Lotto license took effect December 1, 2025, with total upfront fees of about €2.23 billion and the final €1.68 billion installment paid April 24, 2026. (Grafa) Going forward, the things to watch are deleveraging progress now that the largest license payment is behind the company, the pace of U.S. and Italian same-store trends, new lottery contract awards or renewals, and whether the dividend holds as the company balances debt reduction against shareholder returns.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- DKNG (DRAFTKINGS INC.)
- FY2025 10-K: …as the design, development and licensing of sports betting and casino gaming software for its Sportsbook and iGaming product offerings. The Company drives revenue primarily in North America and manages the business activities on a consolidated basis. The determination of reportable operating segments is based on the…
- FY2025 10-K: …development efforts or marketing campaigns, or may adopt more aggressive pricing policies. Furthermore, new competitors, whether licensed or not, may enter the gaming industry. There has also been considerable consolidation among competitors in the entertainment and gaming industries, and such consolidation and…
- RSI (Rush Street Interactive, Inc.)
- FY2025 10-K: …of entertainment, including new forms of entertainment, our business, financial condition, results of operations and prospects could be adversely affected. Our current and potential domestic and international competitors range from large and established companies to emerging start-ups. Some competitors have longer…
- FY2025 10-K: …some of which may be new entrants to the gaming and entertainment industry, may introduce competitive services and new offerings such as sports-based prediction markets. There has also been consolidation among competitors in the entertainment and gaming industries and such consolidation and future consolidation could…
- CHDN (Churchill Downs Inc)
- FY2025 10-K: …be impacted. Competition for the type of talent we seek to hire continues to be a challenge in the geographic areas in which we operate. As a result, we may incur significant costs to attract and retain highly skilled employees. We may be unable to attract and retain the personnel necessary to sustain our business or…
- FY2025 10-K: …racing, gaming, and other services. • For the Gaming segment, revenue is disaggregated by location given the geographic economic factors that affect the revenue of Gaming service offerings. Within the Gaming segment, revenue is further disaggregated between live and simulcast racing, racing event-related services,…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.