William Blair analyst Sharon Zackfia has maintained their neutral stance on PLAY stock, giving a Hold rating today.
Sharon Zackfia’s rating is based on the anticipation of continued comparable sales declines for Dave & Buster’s Entertainment in the fourth quarter. The company is expected to underperform against consensus expectations, with a projected comparable sales decline of 7% to 8%, which is a decrease from the previously estimated 5% decline and aligns with the consensus of a 7% drop.
Additionally, the anticipated sales decline is expected to lead to a 190-basis-point reduction in unit-level margins to 28.9%, resulting in a 16% decrease in adjusted EBITDA to $128 million. This figure falls below the consensus estimate of $130 million, although it remains within the company’s implied guidance range of $126 million to $136 million. These factors collectively contribute to the Hold rating, as they suggest a cautious outlook for the company’s near-term financial performance.
In another report released today, Truist Financial also maintained a Hold rating on the stock with a $21.00 price target.