Dave & Buster’s Entertainment Inc. (NASDAQ:PLAY) saw its stock price climb to $35.69, a modest increase of 0.9% Today, outshining the slight decline in the S&P 500 and contrasting with mixed movements in other major indices. While the S&P 500 dipped by 0.08%, the Dow Jones Industrial Average edged higher by 0.16%, and the Nasdaq Composite Index fell by 0.22%.
The entertainment and dining venue’s shares have experienced a notable uptrend over the past month, appreciating by 6.25%. This performance has not only outpaced the broader Retail-Wholesale sector’s advance of 4.32% but also exceeded the S&P 500’s rise of 1.42% during the same period.
Investors are eyeing the upcoming earnings report from Dave & Buster’s with particular interest due to anticipated figures that suggest a downturn from the previous year. Expectations are set for an earnings per share (EPS) of -$0.19, which would mark a significant drop from last year’s corresponding quarter. Revenue projections are similarly subdued, with forecasts placing them at $473.55 million, marginally below last year’s figures.
For the full fiscal year, analysts project earnings of $2.85 per share and revenue totaling $2.24 billion.
Despite these challenging projections, Dave & Buster’s Forward Price-to-Earnings (P/E) ratio is currently at 12.4, which implies a potential undervaluation when compared to the industry average Forward P/E of 19.84. The company is categorized within the Retail – Restaurants industry, which holds a strong position in the top 30% of all industries based on the Zacks Industry Rank.
However, recent analyst sentiment does not appear optimistic as Dave & Buster’s has been assigned a Zacks Rank of #4 (Sell). This ranking reflects an unfavorable business outlook and suggests caution, given that stocks rated highly by Zacks have historically delivered an average annual return of +25% since 1988.
As investors and analysts look toward Dave & Buster’s financial updates, market reactions will likely hinge on whether upcoming earnings validate or defy prevailing expectations and rankings.
InvestingPro Insights
InvestingPro’s real-time data and tips provide additional insights into Dave & Buster’s financial performance and market position. According to InvestingPro, the company’s market cap is currently 1530M USD, with a P/E ratio of 12.17, slightly lower than the Forward P/E ratio mentioned in the article. The company’s revenue for the last twelve months as of Q2 2024 was 2184.33M USD, indicating a growth of 38.2%.
Two key “InvestingPro Tips” to note are: Firstly, the company shows high earnings quality with free cash flow exceeding net income. Secondly, management has been aggressively buying back shares, which can be a sign of confidence in the company’s future performance. However, it’s worth noting that 8 analysts have revised their earnings downwards for the upcoming period. This might be one of the reasons why the stock price movements are quite volatile, as indicated by InvestingPro.
For more in-depth analysis and additional tips, consider exploring InvestingPro’s product offerings. With a total of 10 tips available for Dave & Buster’s, InvestingPro provides valuable insights for investors and market enthusiasts alike.
