Lucky Strike Entertainment Corp (NYSE: LUCK)

Sector: Consumer Cyclical Industry: Leisure CIK: 0001840572
Market Cap 1.16 Bn
P/B -3.19
P/E -12.30
P/S 0.94
ROIC (Qtr) -19.60
Div Yield % 2.67
Rev 1y % (Qtr) 2.26
Total Debt (Qtr) 3.25 Bn
Debt/Equity (Qtr) -8.94
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About

Bowlero Corp., often recognized by its ticker symbol BOWL, is a leading player in the leisure industry, specializing in entertainment, dining, and amusements. The company has made a significant impact in the bowling entertainment sector since its acquisition of the original Bowlmor Lanes location in 1997 in New York City. Today, Bowlero Corp. stands as the world's largest operator of bowling entertainment centers, with a presence that is approximately six times larger than the next largest operator of U.S.-based bowling centers. Bowlero Corp.'s...

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Investment thesis

Bull case

  • Healthy cash reserves of 95.91M provide 2.37x coverage of short-term debt 40.52M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong free cash flow of (203.93M) provides 2.48x coverage of acquisition spending (82.08M), indicating disciplined M&A strategy.
  • Free cash flow of (203.93M) provides excellent 6.07x coverage of dividends (33.60M), indicating sustainable shareholder returns.
  • Operating cash flow of 150.73M provides solid 0.66x coverage of current liabilities 228.57M, showing strong operational health.
  • Operating cash flow of 150.73M fully covers other non-current liabilities 60.56M by 2.49x, showing strong long-term stability.

Bear case

  • Operating cash flow of 150.73M barely covers its investment activities of (441.24M), with a coverage ratio of -0.34, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 150.73M provides thin coverage of dividend payments of (33.60M) with a -4.49 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 95.91M provide limited coverage of acquisition spending of (82.08M), which is -1.17x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of (203.93M) provides weak coverage of capital expenditures of 354.65M, with a -0.57 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 190.32M show weak coverage of depreciation charges of 182.57M, with a 1.04 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Leisure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AS Amer Sports, Inc. 22.38 Bn 71.89 3.67 1.87 Bn
2 HAS Hasbro, Inc. 13.30 Bn 46.47 3.26 3.32 Bn
3 PLNT Planet Fitness, Inc. 7.78 Bn 37.79 6.04 2.58 Bn
4 GOLF Acushnet Holdings Corp. 7.40 Bn 80.24 4.75 0.90 Bn
5 LTH Life Time Group Holdings, Inc. 6.29 Bn 21.85 2.16 4.13 Bn
6 MAT Mattel Inc /De/ 5.43 Bn 12.57 1.04 2.59 Bn
7 YETI YETI Holdings, Inc. 3.97 Bn 24.75 2.17 0.22 Bn
8 MSGE Madison Square Garden Entertainment Corp. 2.95 Bn 56.80 2.91 1.20 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.32 1.19
EV to Cash from Ops. EV/CFO 28.53 -6.09
EV to Debt EV to Debt 1.32 14.49
EV to EBIT EV/EBIT 22.59 -159.90
EV to EBITDA EV/EBITDA 13.37 -4.06
EV to Free Cash Flow [EV/FCF] EV/FCF -21.08 0.74
EV to Market Cap EV to Market Cap 3.71 -0.64
EV to Revenue EV/Rev 3.47 4.65
Price to Book Value [P/B] P/B -3.19 4.75
Price to Earnings [P/E] P/E -12.30 12.00
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -2.36 -0.51
Dividend Payout Ratio % Div Payout % (Qtr) -33.60 3.11
Dividend per Basic Share Div per Share (Qtr) 0.23 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -15.15 6.13
Interest Coverage Int. cover (Qtr) 0.94 -30.68
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -107.30 -13.50
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 18.77 1,190.33
Dividend Growth (1y) % Div 1y % (Qtr) 87.50 13.88
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 1,994.14 -111.75
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 12.51 -165.31
EBIT Growth (1y) % EBIT 1y % (Qtr) 17.25 -1,562.20
EBT Growth (1y) % EBT 1y % (Qtr) 58.38 -1,555.34
EPS Growth (1y) % EPS 1y % (Qtr) -6,800.00 -377.44
FCF Growth (1y) % FCF 1y % (Qtr) -956.39 10.93
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -3.82 17.65
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.38 0.73
Cash Payout Ratio Cash Payout (Qtr) 0.07 0.07
Cash Ratio Cash Ratio (Qtr) 0.42 3.31
Current Ratio Curr Ratio (Qtr) 0.69 4.80
Debt to Equity Ratio Debt/Equity (Qtr) -8.94 2.35
Interest Cover Ratio Int Coverage (Qtr) 0.94 -30.68
Times Interest Earned Times Interest Earned (Qtr) 0.94 -30.68
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 30.10 -57.55
EBIT Margin % EBIT Margin % (Qtr) 15.35 -65.38
EBT Margin % EBT Margin % (Qtr) -0.98 -69.55
Gross Margin % Gross Margin % (Qtr) 35.50 46.51
Net Profit Margin % Net Margin % (Qtr) -7.60 -74.45