On Tuesday, Oppenheimer remained optimistic about Bowlero Corp. (NYSE:BOWL), maintaining an Outperform rating and a $15.00 stock price target. The firm expects Bowlero to report a quarter in line with projections when the company announces its fiscal fourth-quarter 2024 results on September 5, 2024.
The firm predicts same-store sales (SSS) growth of approximately 4.5% for Bowlero, noting that the company appears to have avoided the consumer spending weaknesses that have affected other industry players. Unlike Topgolf, which is expected to report a decline in fiscal year 2024 SSS in the high single to low double-digit percentages, Bowlero's retail traffic, online bookings, and event sales have remained robust.
Looking ahead, Oppenheimer anticipates that Bowlero's management will offer fiscal year 2025 guidance, projecting same-store sales growth in the low to mid-single-digit percentage range. Additionally, the company is expected to outline merger and acquisition (M&A) guidance around $100 million.
However, due to the active market conditions, this figure could be exceeded. The firm also forecasts approximately $45 million in new building expenditures for Bowlero.
In summary, Oppenheimer's stance on Bowlero Corp. is positive, with expectations of sustained growth and healthy operational metrics, as the company prepares to share its upcoming financial results and future outlook.
In other recent news, Bowlero Corp. continues to make strides in the leisure sector. The company is set to deliver a fourth quarter in line with expectations, with an estimated same-store sales growth of approximately 4.5%. This projection, provided by Oppenheimer, contrasts with other industry players expected to see a decline in same-store sales.
Bowlero's robust retail traffic, online reservations, and event bookings have ensured a steady performance, unlike other companies in the leisure sector that are experiencing consumer weakness. The company plans to allocate around $45 million for new construction projects, which, along with strategic acquisitions, is aimed at bolstering its market presence and driving future growth.
In terms of financial performance, Bowlero 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. To bolster its financial flexibility, Bowlero added $50 million to its credit facility, bringing the total to $335 million in collaboration 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. These are recent developments in Bowlero's ongoing journey.
InvestingPro Insights
As Bowlero Corp. (NYSE:BOWL) gears up to release its fiscal fourth-quarter 2024 results, insights from InvestingPro provide a deeper understanding of the company's financial health and market performance. With a market capitalization of $1.65 billion and a P/E ratio of 17.45, Bowlero demonstrates a significant market presence. Despite a projected net income decline this year, Bowlero has been profitable over the last twelve months, reflecting a solid financial footing.
InvestingPro Tips indicate that Bowlero operates with a substantial debt burden, which investors should consider when evaluating the company's long-term sustainability. However, management's aggressive share buyback strategy suggests confidence in the company's prospects and a commitment to enhancing shareholder value. Furthermore, analysts remain optimistic, predicting profitability for Bowlero this year, aligning with Oppenheimer's positive outlook.
InvestingPro data reveals that Bowlero's revenue growth over the last twelve months was 2.12%, with a quarterly increase of 6.95% in Q3 2024, indicating steady progress. Moreover, the company's gross profit margin stands at 28.02%, showcasing its ability to maintain profitability amidst market fluctuations. For a more comprehensive analysis and additional InvestingPro Tips on Bowlero Corp., interested readers can explore https://www.investing.com/pro/BOWL, which lists further insights and metrics to consider.
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