Aristocrat Leisure Shares (ASX:ALL) Sharply Lower as Revenue Misses

Aristocrat Leisure shares (ASX: ALL) fell sharply today, down 8.85% as H1 earnings came in below estimates for the period. The day could in fact have been considerably worse, with the shares moving more than 6% off the intra-day low. Revenue of $3.03billion was an 8.7% rise from the same period YoY, yet represented a miss on the $3.3 billion expected. The company also announced an interim unfranked dividend payable on July 1st of $0.44. 

Today’s results have erased half of the rally in the shares that followed April 7th, and put ALL firmly into negative territory YTD (-9.51%). Despite the near term pressure, when zooming out, Aristocrat Leisure’s shares have strongly outperformed the ASX 200 over the past year, with a gain of 55.41% vs 7.15% for the bluechip index. 

Ahead of 1H25 results, Macquarie projected NPATA of $809 million (+6% YoY), citing strength in gaming and interactive segments offsetting Plarium’s divestment. The broker’s $75 price target reflected confidence in Aristocrat’s 14% three-year EPS growth trajectory and M&A optionality.

Looking back at the prior year, and Aristocrat’s FY24 results (ending September 2024) revealed a 17% increase in normalised net profit after tax and amortisation (NPATA) to $1.55 billion, driven by record installations in North America and disciplined cost management. Revenue grew 4.9% to $6.6 billion, with the Aristocrat Gaming segment delivering a 9% profit increase in North America. 

Capital management initiatives have also been pivotal. In February 2025, Aristocrat launched a $750 million (AUD) on-market buyback, following the completion of a $1.85 billion program. These repurchases, funded through operational cash flow and Plarium sale proceeds, reduced shares outstanding by 4.2% over 12 months, providing upward pressure on earnings per share. Concurrently, the company accelerated repayment of a $250 million term loan, lowering net debt to 1.2x EBITDA.

The sale of Plarium Global Limited to Modern Times Group (MTG) for up to $1.25 billion was finalised in February, concluding a strategic review initiated in May 2024. The transaction, which included a $620 million upfront payment and $200 million in performance-linked earnouts, allowed Aristocrat to reallocate capital toward core gaming segments like regulated land-based operations and real-money gaming. The divestment marked a shift away from casual and mid-core mobile gaming, with the company simultaneously announcing a restructuring of its Big Fish Games division to focus solely on maintaining profitable evergreen titles. 

While the MACD oscillator signals a short-term caution, long-term momentum indicators remain positive, and analysts forecast a consensus target price of 74.91AUD, with some bullish estimates reaching as high as 84.00 AUD. 

Today’s results, and the subsequent decline in the share price are a setback for the bulls. With the next set of results not due for some time, the narrative could remain unless a catalyst is forthcoming.