Analysts think this growth share could rally a further 26% in the next year

In a world of AI and high-growth tech companies, some businesses outside these sectors are often overlooked, even when they’re still reporting strong momentum. So when I spotted a growth share from the FTSE 250 that’s up 20% in the past month and also has strong analyst forecasts, I knew I couldn’t pass it by. Here’s what I found out.

Time for a strike

I’m talking about the Hollywood Bowl Group (LSE:BOWL). The business is the UK’s largest ten-pin bowling operator and the world’s second-largest, managing more than 90 entertainment centres across the UK and Canada. From the current price of 307p, the group of nine analysts currently offering forecasts have an average target price of 388p. This represents just over a 26% move higher from the current price. Interestingly, the team at Investec has the highest target at 450p.

Part of the optimism in the forecasts likely stems from recent performance. For example, last week the company released its latest half-year results. Revenue climbed 9.5% to a record £141.5m, while adjusted profit before tax rose 8.1% to £32.1m. As well as lifting the dividend, the management team announced a new £5m share buyback programme. This is usually taken well by investors, as it signals confidence in both the balance sheet and future cash generation.

Looking ahead

I believe there are several reasons why the experts could be correct. First, the company still has a significant runway for expansion. Management has outlined plans for additional centres across the UK. New sites have reportedly been performing ahead of expectations, which could support another round of earnings upgrades if that trend continues.

Second, even though some might see the operating model as old-fashioned, it’s actually very appealing during uncertain economic periods. When you think about it, the business generates strong cash flow, carries a net cash position, pays dividends, and operates in a segment where consumers often trade down into lower-cost leisure options rather than abandoning entertainment altogether. That combination of growth and defensive qualities is relatively rare in the UK market and could therefore help the share price remain in demand.

Third, I think the stock has room to run as it’s not flashing as overvalued. It has a price-to-earnings ratio of 14.13, which is above the FTSE 250 average of 10.6 but isn’t high for a growth stock.

Managing expectations

Of course, there are risks. Labour costs remain a challenge, with management openly discussing pressure from higher wages and employment taxes. We also shouldn’t forget that analyst forecasts are still subjective opinions. There’s nothing to say that the 26% target will be hit over the coming year.

Yet even with these factors, I believe the stock could be primed to keep moving higher. Therefore, it’s one I’m seriously thinking about buying and believe investors could consider doing the same.

Should you invest £5,000 in Hollywood Bowl Group Plc right now?

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Jon Smith has no positions in the shares mentioned.