Dave & Busters Entertainment (PLAY) AI Stock Analysis

• Market Cap: $746.16M
• Dividend Yield: N/A
• Average Volume (3M): 1.35M
• Price to Earnings (P/E): 15.5
• Beta (1Y): 0.88
• Revenue Growth: -3.30%
• EPS Growth: -48.76%
• Country: US
• Employees: 23,420
• Sector: Communication Services
• Sector Strength: 83
• Industry: Entertainment
• EPS (TTM): 0.24
• Shares Outstanding: 34,528,522
• 10 Day Avg. Volume: 931,434
• 30 Day Avg. Volume: 1,352,437
• 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 Cap: 5.12
• Enterprise Value/Revenue: 0.44
• Enterprise Value/Gross Profit: 3.04
• Enterprise Value/Ebitda: 1.97
• 1Y Price Target: $24.60
• Price Target Upside: 13.84% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

Dave & Busters Entertainment's overall score reflects a challenging financial environment with declining revenues and high leverage, balanced by improvements in cash flow efficiency. The stock's technical indicators suggest short-term potential, while a fair valuation and strategic adjustments offer some optimism. However, significant issues in past management decisions and operational missteps continue to pose risks.

Positive Factors

Improvement in Sales Trends

As the company has focused on getting 'back to basics,' sales trends have significantly improved relative to the fourth quarter and February.

Optimism for Future Momentum

Despite ongoing comp softness, there is optimism for stronger momentum in FY25 as fully programmed remodels come online and marketing optimization work comes to light.

Negative Factors

Impact of External Disruptions

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.

Leadership and Strategic Uncertainty

PLAY announced the resignation of CEO Chris Morris, which adds uncertainty to the company's future strategy.

Sales and Margin Decline

A projected 7% to 8% decline in comparable sales is expected, alongside an estimated 190-basis-point contraction in unit-level margin to 28.9% due to sales deleverage.

Dave & Busters Entertainment Business Overview & Revenue Model

Company Description

Dave & Buster's Entertainment, Inc. owns and operates entertainment and dining venues for adults and families in North America. Its venues offer a menu of entrées and appetizers, as well as a selection of non-alcoholic and alcoholic beverages; and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events. The company operates its venues under the Dave & Buster's name. As of January 30, 2022, it owned and operated 144 stores located in 40 states, Puerto Rico, and one Canadian Province. The company was founded in 1982 and is headquartered in Coppell, Texas.

How the Company Makes Money

Dave & 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.

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.

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.

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

• Technical Analysis Sentiment: Neutral
• Last Price: 21.61
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PLAY, the sentiment is Neutral. The current price of 21.61 is above the 20-day moving average (MA) of 20.27, above the 50-day MA of 19.21, and below the 200-day MA of 28.32, indicating a neutral trend. The MACD of 0.76 indicates Negative momentum. The RSI at 58.10 is Neutral, neither overbought nor oversold. The STOCH value of 85.89 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PLAY.

Dave & Busters Entertainment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNK	74 Outperform	$3.66B	21.02	71.46%	0.25%	-0.80%	13.07%
BATRA	68 Neutral	$2.58B	―	-4.43%	―	4.04%	82.47%
PLAY	65 Neutral	$746.16M	15.55	29.37%	―	-3.30%	-48.76%
MCS	63 Neutral	$523.24M	―	-2.83%	1.64%	4.18%	-207.46%
MSGE	63 Neutral	$1.82B	14.02	1222.83%	―	5.81%	133.05%
Sector *	60 Neutral	$14.09B	6.89	-3.35%	3.69%	2.42%	-36.25%
AMC	42 Neutral	$1.28B	―	20.03%	―	-5.43%	26.07%

Dave & Busters Entertainment Corporate Events

Dave & Buster’s Announces New CEO Agreement and Board Changes

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.

Spark’s Take on PLAY Stock

According to Spark, TipRanks’ AI Analyst, PLAY is a Neutral.

Dave & Buster’s faces significant financial challenges, including high leverage and declining revenues, impacting its overall stock score. However, strategic initiatives such as new game offerings, international expansion, and share repurchases provide optimism. The reasonable valuation and strong financial position, along with strategic leadership changes, contribute positively to the score.

To see Spark’s full report on PLAY stock, click here.