Canaccord Genuity maintained its Buy rating on Bowlero Corp. (NYSE:BOWL) with a steady price target of $18.00. The endorsement follows recent investor meetings with Bowlero's CFO Bobby Lavan, which highlighted the company's growth strategies.
Bowlero's approach includes refining its food and beverage offerings to potentially increase customer spending and sustain same-store sales (SSS) growth in the upcoming quarters. The company's expansion plans also involve the opening of new Lucky Strike entertainment centers in major cities, which is expected to be complemented by targeted acquisitions aimed at boosting average revenue per center.
The firm has ventured into outdoor family entertainment with the acquisition of Raging Waves, and anticipates further growth in this area. The strategy to acquire additional water parks is seen as a way to diversify Bowlero's portfolio and provide a natural hedge against seasonal weather impacts while benefiting from operational synergies.
Canaccord's analysis suggests that Bowlero's expansion, coupled with mid-single-digit SSS growth, presents an attractive investment opportunity. The firm believes that Bowlero's stock holds potential for upside if the company successfully implements its strategic initiatives.
Bowlero Corporation has reported impressive growth in its latest quarterly earnings. The company experienced a 6.9% rise in same-store sales and a near 20% increase in revenue. Looking ahead, Bowlero has projected four-wall EBITDA of $520 million and consolidated EBITDA over $400 million for fiscal year 2025, indicating a total growth between mid-single-digit to 10%.
The company has plans to expand, with a focus on new builds, acquisitions, and upgrades within the bowling sector and exploring opportunities in location-based entertainment. Bowlero's liquidity at the end of the quarter was strong, noted at $386 million, including $67 million in cash.
Despite potential challenges with New Year's timing affecting quarterly performance, the company anticipates a positive performance throughout the year. Bowlero also plans to allocate $154 million in capital expenditures for fiscal year 2025.
InvestingPro Insights
Bowlero Corp. (NYSE:BOWL) presents a mixed financial picture that adds context to Canaccord Genuity's Buy rating. According to InvestingPro data, the company's revenue growth remains strong, with an 18.56% increase in quarterly revenue as of Q4 2024. This aligns with Canaccord's positive outlook on Bowlero's expansion strategies and potential for same-store sales growth.
However, investors should note that Bowlero is currently not profitable over the last twelve months, with a negative P/E ratio of -317.42. This underscores the importance of the company's growth initiatives in achieving profitability. An InvestingPro Tip suggests that net income is expected to grow this year, which could support Canaccord's optimistic stance.
Another InvestingPro Tip indicates that management has been aggressively buying back shares, potentially signaling confidence in the company's future prospects. This aligns with Canaccord's view of Bowlero as an attractive investment opportunity.
For readers interested in a more comprehensive analysis, InvestingPro offers additional tips and insights that could further inform investment decisions regarding Bowlero Corp.
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