We are seeing all sorts of stocks rally sharply off their lows. The S&P 500 is only a couple of percentage points off all-time highs heading into Thursday afternoon, something Fed Chair Powell’s speech could catapult even higher. It can make you feel like any stock you pick is going to rocket higher. Beware, because the stocks which perform over the long run are typically the ones with the strongest earnings trends, not the weakest.

Stocks which have unfavorable Zacks Ranks have seen analysts cut expectations for the coming years. These stocks are ones investors need to be aware of. Even long-term investors in the stock m may not have known estimates are slipping. It’s not a reason to panic sell, but it is a reason to take a closer look.

Today’s Bear of the Day is Zacks Rank #5 (Strong Sell) Bowlero (BOWL). Bowlero Corp. is an owner and operator of bowling centers as well as owner of the Professional Bowlers Association. The company operates 352 locations across North America.

The reason for the unfavorable rank is a series of negative estimate revisions following yet another earnings miss. Last quarter’s EPS number came in 45% shy of expectations. The company has missed every analyst expectation this year, missing by an average of a dime each time.

(Click on image to enlarge)

Image Source: Zacks Investment Research

Current year EPS is now forecast to come in at a 20-cent loss. Next year’s number is expected to come in at 32 cents. That puts Bowlero’s forward PE at 35x.

The Leisure and Recreation Services industry ranks in the Bottom 30% of our Zacks Industry Rank. There are other stocks within this industry which are in the good graces of our Zacks Rank. These include Zacks Rank #1 (Strong Buy) stocks Norwegian Cruise Lines (NCLH) and Royal Caribbean Cruises (RCL).

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