With Dave & Busters’ (NASDAQ:PLAY) earnings report proving a lot less potent than expected and analysts starting to come out against it, it’s little surprise that shares have been in open decline recently. In fact, today added day seven to the lineup of red ink days for the entertainment and restaurant chain as it lost over 7% following another analyst pan.
This time, it was Raymond James analyst Brian Vaccaro, who has a solid 64% success rate on PLAY stock, that came out against Dave & Busters as it approaches an “inflection point.” Vaccaro cut estimates on Dave & Busters’ first-quarter earnings, dropping from the original estimate of $1.79 to $1.48 per share. He also dropped Fiscal Year 2024 estimates from $4.07 to $3.69.
In fact, Vaccaro looked at all of Dave & Busters’ operations and wondered if investors weren’t going to start questioning pretty much the whole thesis before too much longer. Points like cost-cutting that starts to impact the guest experience might come into play, or shifting away from television advertising spending toward digital.
Speaking of Guest Experience…
Perhaps Dave & Busters saw these objections coming. Just hours ago, a new report from Nation’s Restaurant News emerged, detailing an extensively modified menu at Dave & Busters. Admittedly, no one goes to a Dave & Busters looking for haute cuisine, but the changes might prove pretty welcome for anyone getting bored of the fare therein.
CEO Chris Morris noted that Dave & Busters “…has lost attachment over the past decade,” and hopes that the over 20 new food and drink items will help turn that around. Slated for release is the “Game Day Grub Sampler Board,” which features pretzel dogs and bone-in wings, as well as the “Cereal Cake,” which involves marshmallow cream icing, cotton candy, cream sauce and actual Froot Loops cereal.
Is Dave & Busters Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on PLAY stock based on two Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 61.64% rally in its share price over the past year, the average PLAY price target of $71.67 per share implies 27.3% upside potential.
