IGT's Strategic Transformation and Path to 2028: Is the Lottery Pure Play a Hidden Gem?

The acquisition of IGT's gaming and digital businesses by Apollo Funds in July 2025 marked a pivotal shift in the company's trajectory. Now restructured under Voyager Parent LLC, the entity has embarked on a strategic transformation aimed at leveraging synergies across gaming, digital platforms, and financial technology. For value investors, the question remains: does this repositioning create a compelling opportunity for long-term capital appreciation?

Strategic Reorganization and Cost Optimization

Post-acquisition, IGT's leadership has prioritized disciplined cost optimization and operational efficiency. According to an Apollo press release, the newly formed Voyager aims to streamline operations by integrating its Gaming, Digital, and FinTech divisions under a unified structure. This customer-first approach is supported by a "people-first" culture, emphasizing innovation and collaboration. Hector Fernandez, set to assume the CEO role in Q4 2025, is tasked with driving growth through a more agile and well-capitalized platform, the press release adds.

Cost-cutting measures have already begun bearing fruit. While IGT's 2024 results showed a 1% revenue decline and a 4% drop in adjusted EBITDA, according to an iGamingBusiness report, the merger with Everi is expected to unlock $140 million in annual cost synergies. S&P Global Ratings anticipates leverage improvement in 2026, driven by stable market share and operating efficiencies, according to an Octus preview. These steps suggest a disciplined approach to margin preservation, critical for value investors seeking sustainable returns.

Revenue and EBITDA Targets: A Path to Recovery

An Octus preview projects Voyager's pro forma adjusted EBITDA will reach $978.9 million in 2025, with synergies pushing it to $1.119 billion. While IGT's standalone 2024 performance was lackluster, the combined entity's growth prospects are bolstered by iGaming market expansion and digital integration. Analysts at Marketscreener note that Voyager's revenue could grow from $158.6 million in 2025 to $331.2 million in 2027, albeit with a negative P/E ratio (-40x by 2027) and free cash flow yields in negative territory. These metrics highlight near-term challenges but also suggest undervaluation if earnings turn positive by 2028.

Valuation Metrics and Dividend Potential

Despite Voyager's current valuation headwinds, there are hints of value. BrightStar Lottery PLC, which sold its IGT Gaming business for $4 billion, has boosted its quarterly dividend to $0.22 per share and announced a special $3.00 per share payout, according to a BrightStar press release. While not directly tied to IGT, this signals confidence in the broader gaming sector. For Voyager, the negative FCF yield (-13% in 2025) contrasts with its revenue growth trajectory, creating a paradox for value investors. However, IGT's investor relations note that the company has $1.85 billion in senior secured notes, which provides liquidity for strategic investments, potentially accelerating EBITDA recovery.

Long-Term Capital Appreciation: A Calculated Bet

The key to IGT's appeal lies in its 2028 outlook. With Apollo's backing, Voyager is positioned to capitalize on the $50 billion global gaming market, where digital and fintech integration could drive margin expansion. While current metrics are unattractive, the combination of cost discipline, revenue growth projections, and a low-teen yield (if normalized) suggests a compelling risk-reward profile. For patient investors, the path to 2028 may reward those who recognize the hidden gem beneath the surface.