Why Is Bowlero (BOWL) Stock Rocketing Higher Today
What Happened:
Shares of upscale bowling alley chain Bowlero (NYSE:BOWL) jumped 15.4% in the morning session after the company reported second-quarter earnings results. Bowlero beat analysts' revenue expectations. In addition, its full-year revenue guidance came in higher than Wall Street's estimates. The profitability outlook was also promising, with the company expected to achieve 50% operating leverage in FY 2025 as it recovers from wage increases in 2023 and one-time COVID-related costs. Overall, this quarter had some key positives.
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What is the market telling us:
Bowlero’s shares are not very volatile than the market average and over the last year have had only 25 moves greater than 5%. Moves this big are very rare for Bowlero and that is indicating to us that this news had a significant impact on the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago, when the stock dropped 20.4% on the news that the company reported first-quarter results with revenue, adjusted EBITDA, and EPS, all missing Wall Street's expectations. Gross margin also fell significantly during the quarter. The company attributed the weak topline performance to bad weather conditions, in line with the narrative highlighted by some of its peers during the earnings season. Overall, this was a weak quarter for Bowlero.
Bowlero is down 19.9% since the beginning of the year, and at $11.72 per share it is trading 21.8% below its 52-week high of $14.99 from February 2024.
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