On Tuesday, Stifel reaffirmed its Buy rating and $17.00 stock price target for Bowlero Corp. (NYSE:BOWL), emphasizing the company's EBITDA growth potential. The firm shifted its attention from same-store sales (SSS) growth to EBITDA expansion as a key metric for Bowlero's performance.
The analyst noted that while initial skepticism existed regarding Bowlero's diversification beyond bowling, the successful performance of non-bowling assets has led to a more positive outlook.
Bowlero's early returns from its non-bowling ventures have surpassed expectations, suggesting that future mergers and acquisitions could be highly beneficial for the company. Stifel highlighted the management's dual expertise in both operations and acquisitions, predicting that this skill set will eventually be recognized and rewarded in the market.
The firm projects that Bowlero will experience double-digit EBITDA growth annually from 2025 to 2027. This growth is expected to be driven by both the core bowling business and additional acquisitions that complement the company's existing operations. Stifel's stance indicates confidence in Bowlero's strategic expansion and its potential to enhance shareholder value through a diversified approach.
In other recent news, Bowlero Corporation has been making significant strides in the entertainment sector. The company reported a near 20% increase in revenue and a 6.9% rise in same-store sales in its latest quarterly earnings. For fiscal year 2025, Bowlero projected a four-wall EBITDA of $520 million and consolidated EBITDA over $400 million, indicating a total growth between mid-single-digit to 10%.
In addition to its financial growth, Bowlero has been expanding its portfolio. The company recently acquired Boomers Parks and Raging Waves water park, diversifying its offerings and providing a hedge against seasonal weather impacts. Bowlero also plans to enhance its food and beverage offerings, open new Lucky Strike centers, and make strategic acquisitions to boost revenue.
Canaccord Genuity reaffirmed its Buy rating on Bowlero, citing the company's consistent performance and growth potential. However, Piper Sandler initiated coverage on Bowlero with a Neutral rating, expressing a cautious stance due to the company's balance sheet leverage and concerns about the broader U.S. consumer environment.
These recent developments highlight Bowlero's commitment to growth and innovation in the entertainment industry. The company's robust financial performance, strategic acquisitions, and expansion plans position it well for continued success in the upcoming fiscal year.
InvestingPro Insights
Complementing Stifel's optimistic outlook on Bowlero Corp. (NYSE:BOWL), recent data from InvestingPro provides additional context to the company's financial performance and market position. Despite the positive analyst rating, InvestingPro data reveals that Bowlero's stock has faced challenges, with a 13.14% decline in the past month and a 25.69% drop year-to-date. This recent downturn could present an opportunity for investors who align with Stifel's bullish stance.
InvestingPro Tips highlight that management has been aggressively buying back shares, which often signals confidence in the company's future prospects. This aligns with Stifel's positive view on management's operational and acquisition expertise. Moreover, while Bowlero was not profitable over the last twelve months, analysts predict the company will be profitable this year, supporting Stifel's projection of double-digit EBITDA growth.
The company's revenue growth of 9.05% over the last twelve months and a more impressive 18.56% growth in the most recent quarter underscore its expansion trajectory, potentially driven by the successful diversification noted in the Stifel report. With a fair value of $17 USD according to analyst targets, compared to the previous closing price of $10.38 USD, there may be significant upside potential for BOWL shares.
For investors seeking a deeper understanding of Bowlero's financial health and growth prospects, InvestingPro offers 5 additional tips, providing a more comprehensive analysis to inform investment decisions.
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