Monday, Bowlero Corp. (NYSE: BOWL) retained its Buy rating and $18.00 price target from Canaccord Genuity. The company reported its fiscal fourth-quarter results, which showcased revenue surpassing consensus estimates, although its adjusted EBITDA fell short of expectations.
Bowlero experienced a year-over-year increase of approximately 7% in same-store sales, with positive comparisons in each month of the quarter. The company's corporate events and Lucky Strike venues continued to perform well.
The successful launch of the Summer Season Pass has prompted Bowlero to introduce a Fall Pass for October and November, anticipating the busy holiday season. Additionally, the acquisition of Raging Waves waterpark has yielded positive early outcomes, and the company is planning capital investments to enhance capacity and event bookings.
Bowlero's FY25 guidance projects a revenue growth of around 10% year-over-year, with same-store sales expected to rise by a low-to-mid single-digit percentage and an EBITDA margin between 32% and 34%.
The company's capital expenditure for the upcoming fiscal year is estimated at $154 million. This includes approximately $50 million for growth expenditures, $45 million for new constructions, $44 million for maintenance, and $15 million for rebranding Bowlero centers to Lucky Strike. These investments are part of Bowlero's broader strategy to expand its presence in bowling and other location-based entertainment sectors.
Canaccord Genuity's analysis highlights Bowlero's strategic initiatives to enhance its food and beverage offerings and optimize pricing and promotional strategies, which could further boost same-store sales growth. The firm believes Bowlero's valuation is justified, given the potential for growth through its strategic capital deployment and operational improvements.
In other recent news, Bowlero Corp has reported strong fourth-quarter results for the fiscal year 2024, with a significant increase in same-store sales. Analysts from B. Riley, Stifel, Oppenheimer, and Roth/MKM have maintained their positive ratings on the company's stock, highlighting the company's strong fiscal position and projected same-store sales growth. Bowlero's management plans to capitalize on the demand for season pass offerings and has demonstrated strong operating leverage due to increased bowling center traffic.
Bowlero Corp has also recently expanded its revolving credit facility by $50 million, bringing the total to $335 million with JPMorgan Chase (NYSE:JPM) Bank. This move is expected to support both organic and inorganic growth opportunities. The company's Summer Season Pass program has seen record sales exceeding $6 million, and Bowlero has been actively expanding, adding 23 new locations this fiscal year.
The company's acquisition of Raging Waves, Illinois' largest water park, has been viewed positively by Noble Capital. Bowlero Corp is set to announce its fiscal fourth-quarter 2024 results soon, with Oppenheimer expecting the results to align with projections and a same-store sales growth of approximately 4.5%.
InvestingPro Insights
As Bowlero Corp. (NYSE: BOWL) continues to strike a balance between growth and operational efficiency, current InvestingPro data provides a clearer picture of the company's financial health. With a market capitalization of $1.61 billion and a P/E ratio of 17.44, Bowlero appears to be valued reasonably compared to industry averages. Notably, the company has experienced a solid revenue growth of 9.05% over the last twelve months as of Q4 2024, which aligns with the positive same-store sales figures highlighted in Canaccord Genuity's report.
InvestingPro Tips suggest that while Bowlero operates with a significant debt burden, management's confidence is reflected in their aggressive share buyback strategy. This could indicate a belief in the company's value and growth prospects. Additionally, analysts predict the company will remain profitable this year, which is supported by the profitability over the last twelve months. These insights, alongside the 2.04% dividend yield and the anticipation of a 10% revenue growth in FY25 as per company guidance, paint a promising picture for investors.
For those seeking more detailed analysis, there are additional InvestingPro Tips available on Bowlero Corp. at https://www.investing.com/pro/BOWL, offering a comprehensive outlook for more informed investment decisions.
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