Bear of the Day: Lucky Strike Entertainment (LUCK)

Lucky Strike Entertainment (LUCK), currently a Zacks Rank #5 (Strong Sell), operates a network of location-based entertainment venues focused on bowling.

The stock has traded sideways for the last few years and is off its recent lows after earnings. However, there seems to be no upside momentum after a recent earnings miss and falling estimates.

About the Company

Founded in 1997 and headquartered in Mechanicsville, Virginia, the company was formerly known as Bowlero Corp. before rebranding to Lucky Strike Entertainment in December 2024.

Its portfolio includes well-known brands such as AMF, Bowlero, Lucky Strike, Boomers, and the Professional Bowlers Association (PBA). The company’s properties feature bowling, arcade-style amusements, water parks, and family entertainment centers. Founded in 1997 and headquartered in Mechanicsville, Virginia, the company was formerly known as Bowlero Corp. before rebranding to Lucky Strike Entertainment in December 2024.

The company has a market cap of $1.4B and the stock pays a dividend of 2.2%. The stock holds Zacks Style Scores of “B” Value and “C” in both Growth and Momentum.

Q3 Earnings Miss

Lucky Strike’s latest results landed well below expectations, missing the Zacks consensus EPS estimate by 69% and reflecting broad-based weakness in the business.

Q3 net income fell to $13.3 million from $23.8 million a year ago, while revenue declined to $339.9 million from $358 million expected. Adjusted EBITDA also slipped year over year, and same-store revenue fell 5.6%.

The company withdrew its full-year guidance, citing economic uncertainty. Management called out softness in the corporate events segment as a major drag, even as retail, leagues, and food sales showed some resilience.

With same-store sales slipping, corporate bookings under pressure, and management is leaning into cost discipline rather than growth. Even so, Lucky Strike faces a tough road to winning back momentum, especially if macro headwinds persist.

Earnings Estimates Trend Lower

Earnings estimates have shown limited movement since management suspended guidance, but the bias remains negative.

For the next quarter, the consensus loss estimate has inched lower to -$0.16 from -$0.15 over the past 90 days. Expectations for next year have taken a sharper hit, dropping 66% to just $0.01 from $0.03.

While projections for the current year have ticked slightly higher, the overall trend points to caution. Many investors may stay on the sidelines until there is a clearer, sustained turnaround in the outlook.

Technical Take

Not much to read from the chart outside that the stock is going from the upper left to the lower right. This is not the direction the bulls want and to change momentum they will have to sustain price over the 200-day MA at $10.20.

An attempt was made in late July, but the stock failed to hold the gains.

In Summary

With guidance pulled, earnings estimates drifting lower, and the chart stuck in a long-term downtrend, Lucky Strike Entertainment is struggling to spark investor enthusiasm.

Operational challenges in key markets and a lack of upside momentum after the latest earnings miss point to continued headwinds. Until the company can deliver consistent growth in both results and expectations, LUCK may remain a tough bet for bullish investors.

For now, investors looking at the leisure space should look at Carnival (CCL). The stock is a Zacks Rank #1 (Strong Buy) that is trading near 2025 highs.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Source Zacks-com