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Dave & Busters Entertainment (PLAY)
NASDAQ:PLAY
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Dave & Busters Entertainment
(NASDAQ:PLAY)
Rating:68Neutral
Price Target:
$22.00
▲( 7.16% Upside)
Positive Factors
Future Momentum
Despite ongoing comp softness, there is optimism for stronger momentum as fully programmed remodels come online and marketing optimization work comes to light.
Sales Trends
As the company has focused on getting 'back to basics,' sales trends have significantly improved relative to the fourth quarter and February.
Negative Factors
Comparable Sales
A projected 7% to 8% decline in comparable sales is expected.
Leadership Transition
Concerns exist about fiscal Q4 and 1H 2025 financial results presenting downside risk as the company transitions from its prior leadership and implements a new strategic plan.
Wildfires Impact
Recent wildfires in Los Angeles have likely caused reduced customer traffic in several Dave & Buster's locations due to evacuation orders, road closures, and environmental concerns.
Dave & Busters Entertainment (PLAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$708.87M
Dividend YieldN/A
Average Volume (3M)1.06M
Price to Earnings (P/E)14.8
Beta (1Y)0.89
Revenue Growth-3.30%
EPS Growth-48.76%
CountryUS
Employees23,420
SectorCommunication Services
Sector Strength89
IndustryEntertainment
Share Statistics
EPS (TTM)0.24
Shares Outstanding34,528,522
10 Day Avg. Volume860,913
30 Day Avg. Volume1,057,969
Financial Highlights & Ratios
PEG Ratio-0.41
Price to Book (P/B)5.09
Price to Sales (P/S)0.00
P/FCF Ratio-3.15
Enterprise Value/Market Cap5.39
Enterprise Value/Revenue0.44
Enterprise Value/Gross Profit3.04
Enterprise Value/Ebitda1.97
Forecast
1Y Price Target
$24.60Price Target Upside19.82% Upside
Rating ConsensusHold
Number of Analyst Covering8
Dave & Busters Entertainment Business Overview & Revenue Model
Company DescriptionDave & Buster's Entertainment, Inc. (NASDAQ: PLAY) is a North American entertainment and dining company that operates a chain of venues combining dining, arcade gaming, and sports viewing. Founded in 1982 and headquartered in Coppell, Texas, Dave & Buster's offers a unique mix of entertainment experiences, including a full-service restaurant and bar, an extensive selection of arcade games, and large screen TVs for sports and live entertainment events. The company caters to a broad demographic, from families to young adults, providing a dynamic environment for social gatherings and private events.
How the Company Makes MoneyDave & Buster's primarily generates revenue through three key streams: food and beverage sales, amusement and other entertainment sales, and special events. The food and beverage segment includes sales from the company's full-service restaurant and bar offerings, ranging from casual dining options to a variety of alcoholic and non-alcoholic beverages. The amusement and other entertainment sales segment comprises revenue from the company's arcade games, which include a wide array of video and redemption games, as well as other interactive attractions. Dave & Buster's also earns a significant portion of its revenue from hosting special events and private parties, which leverage its entertainment and dining facilities. Additionally, the company benefits from partnerships with game manufacturers and beverage suppliers, which can involve revenue-sharing agreements or promotional arrangements that enhance its offerings and attract customers.
Dave & Busters Entertainment Financial Statement Overview
Summary
Dave & Busters Entertainment faces pressures in profitability and financial stability, with declining revenues and high leverage posing significant challenges. The company benefits from improved operating cash flow efficiency, but the omission of key free cash flow metrics restricts a comprehensive evaluation. Continued focus on reducing debt and enhancing revenue growth will be crucial for financial improvement.Income Statement
Dave & Busters Entertainment has demonstrated a modest financial performance. The gross profit margin remains high at 100% in 2025 due to the same gross profit and total revenue, which may indicate a data reporting issue. The net profit margin has decreased to 2.73% from 5.76% in 2024, showing a decline in profitability. Revenue growth was negative at -3.3% from 2024 to 2025, reflecting challenges in maintaining sales momentum. The EBIT margin fell to 10.34% from 13.9% in 2024, while the EBITDA margin declined to 20.8% from 22.84% previously, indicating reduced operational efficiency.65
Positive
Balance Sheet
The company faces significant leverage with a debt-to-equity ratio of 10.85 in 2025, indicating high financial risk. Stockholders' equity has sharply decreased, reducing the equity ratio to 3.63%, down from 6.69% in 2024, suggesting weakened financial stability. Return on equity dropped to 39.97% from 50.53% in 2024, reflecting reduced profitability relative to equity.55
Neutral
Cash Flow
The company's cash flow situation presents mixed signals. Operating cash flow to net income ratio improved to 5.36 from 2.87 in 2024, showing better cash conversion of profits. However, the absence of a calculated free cash flow growth rate and free cash flow to net income ratio limits a thorough analysis. Overall, while operating efficiency appears to have improved, the lack of data on free cash flow is a concern.60
Neutral
| Breakdown | ||||
| Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.13B | 2.21B | 1.96B | 1.30B | 436.51M | Gross Profit |
| 1.82B | 723.90M | 1.66B | 1.10B | 361.61M | EBIT |
| 220.40M | 306.60M | 262.51M | 187.18M | -252.61M | EBITDA |
| 443.40M | 503.70M | 426.87M | 312.35M | -116.89M | Net Income Common Stockholders |
| 58.30M | 126.90M | 137.10M | 108.70M | -206.97M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 6.90M | 37.30M | 181.59M | 25.91M | 11.89M | Total Assets |
| 4.02B | 3.75B | 3.76B | 2.35B | 2.35B | Total Debt |
| 3.14B | 3.00B | 2.86B | 1.75B | 1.86B | Net Debt |
| 3.13B | 2.96B | 2.68B | 1.73B | 1.85B | Total Liabilities |
| 3.87B | 3.50B | 3.35B | 2.07B | 2.20B | Stockholders Equity |
| 145.80M | 251.20M | 410.54M | 275.46M | 153.23M |
| Cash Flow | Free Cash Flow | |||
| -217.90M | 34.00M | 210.24M | 190.93M | -132.24M | Operating Cash Flow |
| 312.30M | 364.20M | 444.47M | 283.13M | -49.22M | Investing Cash Flow |
| -529.80M | -329.10M | -1.05B | -91.47M | -81.96M | Financing Cash Flow |
| 187.10M | -179.40M | 762.81M | -177.64M | 118.42M |
Dave & Busters Entertainment Technical Analysis
Negative
20.53
Price Trends
19.39
Positive
22.17
Negative
27.98
Negative
Market Momentum
0.46
Positive
50.59
Neutral
23.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PLAY, the sentiment is Negative. The current price of 20.53 is below the 20-day moving average (MA) of 20.62, above the 50-day MA of 19.39, and below the 200-day MA of 27.98, indicating a neutral trend. The MACD of 0.46 indicates Positive momentum. The RSI at 50.59 is Neutral, neither overbought nor oversold. The STOCH value of 23.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PLAY.
Dave & Busters Entertainment Risk Analysis
Dave & Busters Entertainment disclosed 30 risk factors in its most recent earnings report. Dave & Busters Entertainment reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Dave & Busters Entertainment Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $3.73B | 21.43 | 71.46% | 0.25% | -0.80% | 13.07% | |
68 Neutral | $2.52B | ― | -4.43% | ― | 4.04% | 82.47% | |
68 Neutral | $708.87M | 14.77 | 29.37% | ― | -3.30% | -48.76% | |
66 Neutral | $522.02M | ― | -2.83% | 1.64% | 4.18% | -207.46% | |
63 Neutral | $1.73B | 13.37 | 1222.83% | ― | 5.81% | 133.05% | |
60 Neutral | $14.12B | 6.43 | -3.56% | 3.69% | 2.49% | -35.43% | |
55 Neutral | $1.40B | ― | 20.03% | ― | -5.43% | 26.07% |
* Communication Services Sector Average
Performance Comparison
PLAY
Dave & Busters Entertainment
20.53
-28.34
-57.99%
CNK
Cinemark Holdings
32.45
15.42
90.55%
MCS
Marcus
17.06
6.24
57.67%
AMC
AMC Entertainment
3.24
-1.64
-33.61%
MSGE
Madison Square Garden Entertainment Corp.
36.55
1.29
3.66%
BATRA
Atlanta Braves Holdings Inc Class A
43.51
2.06
4.97%
Dave & Busters Entertainment Earnings Call Summary
Earnings Call Date:Apr 07, 2025
(Q4-2024)
| % Change Since: 26.81%|
Next Earnings Date:Jun 10, 2025
Earnings Call Sentiment Neutral
The earnings call highlights both challenges and corrective actions in response to previous missteps. While there are positive signs of improvement in recent months and a strong financial position, significant issues in marketing, operations, and sales performance persist. The strong focus on new game offerings and international expansion provides optimism for future growth.Q4-2024 Updates
Positive Updates
Improved Trends in March and April
The company saw notable improvements in revenue trends during March and April, following a challenging fourth quarter, indicating positive momentum moving forward.
Strong Financial Position
Dave & Buster's maintains a strong financial position with relatively low leverage, no near-term debt maturities, and no operative financial covenants.
Launch of New Games
The introduction of new games, including the Human Crane and several premium arcade games, is expected to drive customer engagement and revenue with a promising return on investment.
International Expansion
The company opened its first international franchise location in India and plans to open at least six additional franchise units in the next 12 months.
Share Repurchase Program
Dave & Buster's repurchased approximately 5 million shares in fiscal 2024, representing 12.4% of shares outstanding, and has continued repurchases into fiscal 2025.
Negative Updates
Fourth Quarter Comparable Store Sales Decline
Comparable store sales decreased by 9.4% in the fourth quarter, indicating significant challenges during this period.
Marketing and Operational Missteps
Previous leadership made significant changes in marketing and operations that negatively impacted the business, such as eliminating TV advertising and overwhelming customers with promotions.
Menu Changes Led to Trade Down
Changes in the menu led to a trade down, with the elimination of popular high-ticket entrées and the over-promotion of lower-ticket items.
Challenges with Remodel Strategy
The remodel strategy was not properly tested, leading to overspending and mixed results, requiring a reevaluation of the prototype and budget.
Decrease in Games Investment
Prior leadership de-emphasized games development and investment, resulting in a lack of new games introduced for over two years.
Company Guidance
In the Dave & Buster's Q4 and Fiscal Year-End 2024 earnings call, the leadership team outlined several key metrics and strategic shifts aimed at improving future performance. Despite a 9.4% decline in comparable store sales for the quarter, the company generated $535 million in revenue, $9 million in net income, and an adjusted EBITDA of $127 million, resulting in an adjusted EBITDA margin of 23.8%. The leadership emphasized a strategic return to basics, highlighting efforts to unwind past mistakes in marketing, operations, and investments. They reported a $108.9 million operating cash flow for the quarter and noted a strong financial position with a net total leverage ratio of 2.8 times. For fiscal 2025, the company expects total capital expenditures not to exceed $220 million, plans to open 10 to 12 new stores, and anticipates improvements in revenue, adjusted EBITDA, and free cash flow. To support their growth plans, they repurchased nearly 3 million shares during the quarter and completed sale leaseback transactions generating $111 million in proceeds. The leadership remains optimistic about enhancing shareholder value through strategic adjustments and a focus on driving both revenue growth and cash flow generation.Dave & Busters Entertainment Corporate Events
Executive/Board ChangesShareholder Meetings
Dave & Buster’s Announces New CEO Agreement and Board Changes
Neutral
May 2, 2025
On April 28, 2025, Dave & Buster’s Entertainment announced that directors Michael J. Griffith, Gail Mandel, and Jennifer Storms will not stand for reelection at the upcoming annual meeting on June 20, 2025. Their decision is not due to any disagreements with the company, and the board will reduce its size from eight to seven members. Additionally, on May 2, 2025, the company entered into a supplemental agreement with Interim CEO Kevin Sheehan, providing him with equity-based compensation contingent on performance goals and shareholder approval of the 2025 Omnibus Incentive Plan. The company also announced the nomination of Allen R. Weiss and Nathaniel J. Lipman as new board members, bringing extensive industry expertise to the board.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.