Is PLAY Stock a Buy After a Dave & Buster's Earnings Beat?
PLAY stock is higher Wednesday after the entertainment and restaurant chain reported strong Q2 earnings, but what does Wall Street have to say?
Dave & Buster's Entertainment (PLAY) stock is struggling for direction Wednesday after the entertainment and restaurant chain reported its second-quarter earnings results.
In the 13 weeks ended August 6, Dave & Buster's revenue increased 2.8% year-over-year to $557.1 million, helped by the addition of 13 net new stores. While its comparable-store sales decreased 6.3%, earnings per share (EPS) were up 19.1% from the year-ago period to $1.12.
"We are pleased with the progress we are making on our strategic initiatives and on the strong financial results achieved during the quarter," said Dave & Buster's CEO Chris Morris in a statement. "During the quarter, we grew revenue and adjusted EBITDA [earnings before interest, taxes, depreciation and amortization], expanded our adjusted EBITDA margins and generated strong operating cash flow which allowed us to invest in the business and return cash to shareholders."
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results were mixed compared with what analysts expected. Wall Street was anticipating revenue of $560.6 million and earnings of 86 cents per share, according to MarketWatch.
"While we are disappointed with our same-store sales performance during the quarter in this complex and challenging environment, we are laser focused on our medium-term goals and encouraged by the progress we are making on each of the initiatives," Morris said. "We fully expect the impact of our initiatives to lead to growth in same-store sales, revenue, EBITDA and cash flow in the coming quarters."
Is PLAY stock a buy, sell or hold?
Dave & Buster's shares are down more than 45% for the year to date, but Wall Street is bullish on the consumer discretionary stock.
According to S&P Global Market Intelligence, the average analyst target price for PLAY stock is $52.71, representing implied upside of nearly 80% to current levels. Additionally, the consensus recommendation is Buy.
Speaking for the bulls is financial services firm Jefferies, which has a Buy rating and $60 price target on PLAY stock.
The company is well-positioned to capture share from other entertainment concepts, says Jefferies analyst Andy Barish. The analyst also likes Dave & Buster's strong development opportunity and store economics.
Barish adds that PLAY's long-term operating efficiency potential is underappreciated and its stock is undervalued and trades at a discount to full-service peers.
Related Content
-
Tip: Ways to Track Your Credit Card RewardsHere are the best strategies and apps to help you stay current with your credit card rewards.
-
How New Investors Can Pick Their Perfect Portfolio, According to a ProSee what Cullen Roche has to say about finding your perfect portfolio as a new investor and his two-word answer on where he thinks the stock market is headed in 2026.
-
HNW Retirees: Don't Overlook The Benefits of Social SecurityWealthy retirees often overlook Social Security. But timed properly, it can drive tax efficiency, keep Medicare costs in check and strengthen your legacy.
-
How New Investors Can Pick Their Perfect Portfolio, According to a Pro
See what Cullen Roche has to say about finding your perfect portfolio as a new investor and his two-word answer on where he thinks the stock market is headed in 2026.
-
High-Net-Worth Retirees: Don't Overlook These Benefits of Social Security
Wealthy retirees often overlook Social Security. But timed properly, it can drive tax efficiency, keep Medicare costs in check and strengthen your legacy.
-
Do You Have an Insurance Coverage Gap for Your Valuables? You May Be Surprised to Learn You DoStandard homeowners insurance usually has strict limits on high-value items, so you should formally "schedule" these valuable possessions with your insurer.
-
If You'd Put $1,000 Into Lowe's Stock 20 Years Ago, Here's What You'd Have TodayLowe's stock has delivered disappointing returns recently, but it's been a great holding for truly patient investors.
-
Don't Trade After-Hours Without Reading ThisAre you a night owl or an early bird with a yen for active trading? Before you transact after-hours, consider these tips and potential traps.
-
8 Practical Ways to Declutter Your Life in 2026: A Retirement 'Non-Resolution' ChecklistHere's how to stop wasting your energy on things that don't enhance your new chapter and focus on the things that do.
-
To Retire Rich, Stop Chasing Huge Returns and Do This Instead, Courtesy of a Financial PlannerSaving a large percentage of your income, minimizing taxes and keeping spending in check can offer a more realistic path to retiring rich.
-
New Year, New Retirement Rules: Here's How You Can Keep Up as the Landscape ChangesFor a successful modern retirement, prepare for a longer life, manage high health care costs and prioritize your social life and purpose.
