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Dave & Buster's (PLAY) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 min read

Dave & Buster's (PLAY) closed the most recent trading day at $36.14, moving +0.11% from the previous trading session. This move lagged the S&P 500's daily gain of 0.17%. Meanwhile, the Dow gained 0.55%, and the Nasdaq, a tech-heavy index, lost 0.44%.

Heading into today, shares of the owner of Dave & Buster's, a chain of restaurants and arcades had lost 8.54% over the past month, lagging the Retail-Wholesale sector's gain of 1.41% and the S&P 500's gain of 3.19% in that time.

Wall Street will be looking for positivity from Dave & Buster's as it approaches its next earnings report date. On that day, Dave & Buster's is projected to report earnings of $0.10 per share, which would represent year-over-year growth of 109.9%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $316.87 million, up 190.57% from the year-ago period.

PLAY's full-year Zacks Consensus Estimates are calling for earnings of $2.24 per share and revenue of $1.33 billion. These results would represent year-over-year changes of +147.66% and +204.07%, respectively.

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Any recent changes to analyst estimates for Dave & Buster's should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.15% higher within the past month. Dave & Buster's is currently a Zacks Rank #1 (Strong Buy).

Investors should also note Dave & Buster's's current valuation metrics, including its Forward P/E ratio of 16.15. Its industry sports an average Forward P/E of 20.84, so we one might conclude that Dave & Buster's is trading at a discount comparatively.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 211, putting it in the bottom 17% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Dave & Buster's Entertainment, Inc. (PLAY) : Free Stock Analysis Report
 
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Zacks Investment Research