On Tuesday, Oppenheimer maintained a positive stance on Bowlero Corp. (NYSE: BOWL) stock, reiterating an Outperform rating and a $15.00 price target. The firm's outlook comes ahead of Bowlero's fiscal fourth quarter 2024 earnings report expected on September 5, 2024.
Bowlero Corp., the owner and operator of bowling centers, is projected to deliver a quarter in line with expectations. The company is estimated to report same-store sales (SSS) growth of approximately 4.5%. This performance contrasts with other industry players, such as Topgolf, which is anticipated to experience a decline in SSS.
The analyst noted that Bowlero has not been impacted by the consumer weakness affecting others in the leisure sector. Retail traffic, online reservations, and event bookings for Bowlero have all remained robust. This continued health in key business areas has provided a solid foundation for the company's steady performance.
Looking forward, Bowlero is expected to provide fiscal year 2025 guidance, with same-store sales growth predicted to be in the low to mid-single digits percentage range. Additionally, the company's merger and acquisition guidance is set to approximate $100 million, a figure that could potentially be exceeded given the current dynamic market conditions.
Bowlero also plans to allocate around $45 million for new construction projects. The firm's continued investment in expansion and strategic acquisitions is aimed at bolstering its market presence and driving future growth. The maintained Outperform rating reflects confidence in the company's strategy and its ability to sustain positive momentum.
In other recent news, Bowlero Corp has made significant strides in its financial and operational activities. The company reported third-quarter revenues of $337.7 million, aligning closely with analysts' forecasts.
However, the adjusted EBITDA of $122.8 million slightly missed the estimated $132.5 million. Bowlero has also bolstered its financial flexibility by adding $50 million to its credit facility, bringing the total to $335 million, a move executed with JPMorgan Chase (NYSE:JPM) Bank.
The company's Summer Season Pass program has been successful, with record sales exceeding $6 million. Bowlero has also been actively expanding, adding 23 new locations this fiscal year and planning for more. The acquisition of Raging Waves, Illinois' largest water park, is another recent development, viewed positively by Noble Capital.
Analyst firms Roth/MKM and Oppenheimer have maintained their positive ratings on Bowlero, albeit with adjusted price targets following the Q3 results. Roth/MKM, in particular, has maintained a Buy rating, reflecting confidence in Bowlero's potential for financial growth and operational improvements. These are recent developments in Bowlero's ongoing journey.
InvestingPro Insights
As Bowlero Corp. (NYSE: BOWL) gears up for its fiscal fourth quarter 2024 earnings report, a glance at the real-time data from InvestingPro reveals a company with a robust financial standing. The company's market capitalization is currently at $1.65 billion, indicating a solid position in the market. The P/E ratio, a measure of the company's current share price relative to its per-share earnings, stands at 17.45, which suggests that investors have high expectations of future earnings growth, despite a higher adjusted P/E ratio for the last twelve months as of Q3 2024 at 26.69.
InvestingPro Tips highlight that Bowlero operates with a significant debt burden, which is an important factor for investors to consider. Yet, management's strategy of aggressively buying back shares reflects confidence in the company's value proposition. Analysts predict that Bowlero will be profitable this year, a sentiment underscored by the company's profitability over the last twelve months.
Furthermore, with a revenue growth of 2.12% over the last twelve months as of Q3 2024 and a gross profit margin of 28.02%, Bowlero appears to be maintaining a healthy profitability margin. For investors seeking more detailed analysis and additional insights, there are over 20 InvestingPro Tips available, which can offer deeper guidance on the company's financial health and strategic direction.
Investors might also be interested in the company's dividend yield of 1.99% as of the latest data, which could offer a steady income stream. The upcoming earnings report on September 5, 2024, will provide further clarity on the company's performance and future outlook. With a fair value estimate of $17 by analysts, compared to the InvestingPro fair value of $8.02, investors are presented with divergent perspectives on the company's intrinsic value.
As Bowlero continues its expansion efforts and prepares to share its fiscal year 2025 guidance, these InvestingPro insights can help investors make more informed decisions in the dynamic market landscape.
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