Which $40b ASX 200 stock is sinking 5% despite strong FY25 profit growth?

Why are investors selling this stock on Wednesday? Let's find out.

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Key points

  • Aristocrat Leisure's shares have fallen nearly 5% following its FY 2025 results, despite reporting an 11% revenue increase and surpassing Bell Potter's expectations slightly.
  • The company's divisions, including Aristocrat Gaming and Product Madness, showed strong performance, contributing to a 15.2% EBITA increase and a 19.2% dividend rise.
  • The market's reaction may be due to Aristocrat's vague guidance for FY 2026 NPATA growth, leading to uncertainty about meeting ambitious forecasts like Bell Potter's 12% growth estimate.

Aristocrat Leisure Ltd (ASX: ALL) shares are under pressure on Wednesday morning.

At the time of writing, the $40 billion gaming technology company's shares are down almost 5% to $61.20.

This follows the release of the ASX 200 stock's FY 2025 results before the market open.

ASX 200 stock tumbles on results day

For the 12 months ended 30 September, Aristocrat Leisure posted an 11% increase in revenue to $6,297 million. Management advised that this reflects market share gains across its portfolio and the inclusion of NeoGames for the full period.

The Aristocrat Gaming business continued to deliver market share gains led by strong performance in outright sales across all markets, supported by the depth and strength of the portfolio.

In addition, the Product Madness business' key Social Casino franchises continued to outperform the market, reflecting focused investment in user acquisition and effective direct to consumer conversion.

And the Aristocrat Interactive business delivered revenue growth mainly due to the inclusion of NeoGames, with organic growth in iLottery and accelerating scaling of Content.

Also growing in the double-digits was the company's EBITA, which lifted 15.2% to $2,234.3 million, and its normalised NPATA, which grew 12% to $1,550.7 million. This was driven by the ongoing execution of its long-term growth strategy, while continuing to invest in market-leading talent, technology and product.

In light of its solid profit growth, the ASX 200 stock's board elected to increase its full year dividend by 19.2% to 93 cents per share.

Commenting on its performance, Aristocrat's CEO, Trevor Croker, said:

We delivered on our second half performance commitments, and achieved a strong Group result for the full year, with double digit growth across most key metrics. This illustrates the quality of Aristocrat's portfolio and ability to grow through different operating environments while also investing for the future.

How does this compare to expectations?

According to a note out of Bell Potter, its analysts were expecting sales of $6,256 million, EBITA of $2,165 million, and adjusted NPATA of $1,530 million.

This means that the company has delivered a result a touch ahead of the broker's expectations in FY 2025.

So, why the selling?

Today's weakness in the Aristocrat share price could be due to its outlook statement.

Although management is positive on its outlook, its guidance for the year ahead was somewhat vague. It said:

Aristocrat expects to deliver NPATA growth over the full year to 30 September 2026 on a constant currency basis.

Bell Potter is forecasting NPATA growth of 12% to $1,738 million for FY 2026. With management not indicating the level of growth it is expecting, the market may feel that this estimate is too ambitious now.

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.

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