BRSL Stock Forecast & Price Target

Brightstar Lottery is supported by resilient, contract-backed lottery cash flows and a simplified pure-play model that has delivered stable growth, with revenues up 1% Y/Y and adjusted EBITDA up 15% Y/Y on operating savings, service gross margin gains, and favorable FX. Its growth case is strengthened by iLottery momentum, with wagers up 30% Y/Y and US wagers up 36% Y/Y, plus Italy wagers up 27% Y/Y, while the cashless vending rollout and retailer distribution initiatives could improve instant sales mix, broaden the player base, and lift margins. The stock also looks compelling on capital return and valuation, as the company returned $72M to shareholders in Q1, offers a near-7% dividend yield, and trades at about 6x forward EBITDA versus higher public lottery and infrastructure comps.

Brightstar Lottery is viewed negatively because its 1Q26 results showed revenue of $587M, below both internal and consensus expectations, while adjusted free cash flow of $55M lagged due to a $42M working-capital drag despite $287M of adjusted EBITDA and 48.9% margins. The business is still underperforming in the US, where sales were down about 1% and flat in some jurisdictions, leaving growth dependent on stronger Italy and Rest of Europe trends rather than its largest market. Near-term fundamentals also look pressured as management expects Q2 revenue to decline year over year from higher service revenue amortization and lower EBITDA from the UK transition and a larger NJ LMA shortfall, alongside contract-renewal, FX, regulatory, and consumer-spending risks.