Now that shares of International Game Technology ( IGT) are trading at 52-week lows, investors may be wondering whether it's time to pull the lever on the slot machine maker's stock.

Some Wall Street analysts are urging caution, however, arguing that positive catalysts for another IGT jackpot remain perhaps a year away. In the meantime, intensifying competition from rivals -- combined with a sluggish slot machine market -- could continue to weigh on the stock.

In a recent survey of slot managers at 150 casinos in 23 states, Goldman Sachs analyst Steven Kent found that replacement demand is slowing but competition is "heating up," with Aristocrat Leisure of Australia, Alliance Gaming ( AGI) and WMS Industries ( WMS) "closing the gap" on IGT.

"We are concerned that heightened competition makes it difficult for any manufacturer to win, especially during a period of slowing slot machine sales," Kent wrote in a research note last week, when he lowered his outlook on gaming-equipment companies to cautious from neutral.

Kent expects IGT shares to stay in a trading range for the next 12 months and has an in-line rating on the stock. Goldman Sachs does and seeks to do business with companies covered in its research reports.

IGT stock was on a roll until last April, when it hit a split-adjusted, all-time high of $47.12. Business was booming as U.S. casinos went on a replacement binge, upgrading older slot machines, often to the newer cashless variety in which players insert tickets instead of change.

But as signs emerged of a cooling replacement cycle, shares began a long slide. They have also suffered as gaming expansion in several states -- which would open opportunities for IGT to sell more machines -- appears to be progressing more slowly than anticipated. The company cited the latter concern in January, when it lowered guidance for the current quarter and said it no longer expected an earnings "breakout" in the second half of its 2005 fiscal year, which ends Sept. 30.

At recent levels between $28 and $29, shares are about 40% below last April's high.

Expectations for lower U.S. slot sales have prompted some analysts to pare estimates for IGT. Last week, Bear Stearns' Joseph Greff reduced his fiscal 2005 EPS estimate to $1.29 from $1.36. The average Wall Street estimate is $1.33, according to Thomson First Call.

Greff also cut his fiscal 2006 EPS estimate to $1.52 from $1.62 and below the consensus of $1.63. Bear Stearns does and seeks to do business with companies covered in its research reports.

In a research note, Greff recommended opportunistic purchases of IGT shares if they fall further -- to between $26 and $27 -- but he expressed concern about WMS and Aristocrat taking market share. Recent interviews with Atlantic City, N.J., slot managers reveal that they are severely scaling back machine orders and shifting market share to WMS and Aristocrat, according to Greff.

Meanwhile, positive developments at IGT may already be accounted for. "While the installed base backlog looks encouraging, as does newer slot product ( Fort Knox, Star Wars, Video Megabucks), which should generate gradual gains, we think this is baked into our new estimates and doesn't really serve as upside EPS," wrote Greff, who rates IGT at peer perform.

Last month, after Aristocrat reported second-half 2004 results, Merrill Lynch analyst David Anders estimated that IGT's market share of casino devices sold slipped to 56%. He attributed the shift to the strength of Aristocrat's penny-denominated slots, but he noted that IGT was losing market share in participation games, in which multiple slot machines are linked and players pay into a group jackpot. Anders estimated that IGT's share of the participation games market fell to 64%.

"Importantly, Aristocrat mentioned that it is not seeing a significant competitive response from other gaming equipment suppliers," Anders wrote in a research note. "Furthermore, we expect Aristocrat to remain aggressive on the North American participation game business. ... We believe that these results highlight that the competitive environment has meaningfully increased and maintaining share will be challenging going forward." Merrill Lynch does and seeks to do business with companies covered in its research reports.

With shares at their lows, other analysts are making the bull case for IGT. They acknowledge the company's recent market share erosion but contend that the worst news is over.

George Smith, an analyst at Davenport & Co., said the stock already reflected the market slowdown and heightened competitive pressures. What's more, he said IGT's strong balance sheet will enable it to react quickly to Aristocrat's challenge.

"IGT spends two to three times more on research and development than their closest peers," he said. "They generate about half a billion dollars annually in free cash flow. ... I don't think their market share's going to slip so far. When they lose ground in a specific area, they go after it with great vigor." Davenport's asset-management unit owns a position in IGT. The company does no banking business with IGT, and Smith owns no shares.

Smith rates IGT a buy and has a 12- to 18-month target price of $40.