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Dave & Busters Entertainment (PLAY)
NASDAQ:PLAY
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Dave & Busters Entertainment
(NASDAQ:PLAY)61Neutral
Positive Factors
Sales Catalysts
Special events remains a sales catalyst, with deposits showing a year-over-year increase driven by new offerings and additional sales managers.
Negative Factors
Financial Performance
FY3Q24 EBITDA of $68 million fell below consensus by $6 million owing to softer comp and weaker margins, partly influenced by calendar shift and weather.
Leadership Transition
PLAY announced the resignation of CEO Chris Morris, which adds uncertainty to the company's future strategy.
Dave & Busters Entertainment (PLAY) vs. S&P 500 (SPY)
Market Cap
$754.27M
Dividend YieldN/A
Average Volume (3M)1.29M
Price to Earnings (P/E)9.5
Beta (1Y)1.07
Revenue Growth1.26%
EPS Growth-23.41%
CountryUS
Employees23,258
SectorCommunication Services
Sector Strength85
IndustryTraditional Media
Share Statistics
EPS (TTM)2.02
Shares Outstanding38,502,888
10 Day Avg. Volume1,416,325
30 Day Avg. Volume1,291,182
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.34
Price to Cash Flow (P/CF)-25.80
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$40.20Price Target Upside108.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Dave & Busters Entertainment Business Overview & Revenue Model
Company DescriptionDave & Buster's Entertainment, Inc. (PLAY) is a leading owner and operator of high-volume entertainment and dining venues that offer a unique combination of entertainment and dining experiences. The company is primarily active in the entertainment and restaurant sectors, providing a wide range of arcade games, virtual reality experiences, and traditional games such as bowling and billiards, alongside a full-service restaurant and bar. Founded in 1982, Dave & Buster's has established itself as a distinctive destination for casual dining and entertainment under one roof, catering to adults and families across the United States and Canada.
How the Company Makes MoneyDave & Buster's makes money through a dual revenue model consisting of entertainment and food and beverage sales. A significant portion of its revenue is generated from the sale of game cards, which customers use to play a variety of arcade and virtual reality games. Additionally, the company earns from its extensive menu offerings, which include appetizers, entrees, desserts, and a wide selection of beverages, including alcoholic drinks. Dave & Buster's also engages in partnerships and promotional activities that drive customer traffic and boost sales, such as collaborations with game developers for exclusive game releases. The company strategically locates its venues in high-traffic areas to maximize visitor numbers and leverages marketing campaigns to attract and retain customers.
Dave & Busters Entertainment Financial Statement Overview
Summary
Dave & Buster's Entertainment shows solid profitability in operations with a healthy gross profit margin. However, challenges are evident with a decreased net profit margin, high debt-to-equity ratio, and negative free cash flow, indicating leverage risks and cash flow management issues.Income Statement
Dave & Buster's Entertainment shows a mixed performance in its income statement. The TTM gross profit margin is healthy, indicating solid profitability from operations. However, the net profit margin has decreased compared to the previous annual period, reflecting challenges in translating revenue into net earnings. The revenue growth rate has been volatile, with recent TTM data showing a slight decline in revenue compared to the previous year.65
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio, indicating significant leverage, which poses potential risks, especially in unstable market conditions. The return on equity is moderate, reflecting decent but not exceptional returns to shareholders. The equity ratio is low, suggesting heavy reliance on debt financing relative to equity.55
Neutral
Cash Flow
Cash flow analysis shows concerning trends, with negative free cash flow in the TTM period. The operating cash flow to net income ratio is satisfactory, indicating reasonable cash generation from operations, but free cash flow metrics suggest pressures from capital expenditures.50
Neutral
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.20B | 2.21B | 1.96B | 1.30B | 436.51M | 1.35B | Gross Profit |
| 926.50M | 723.90M | 1.66B | 1.10B | 361.61M | 1.12B | EBIT |
| 276.40M | 306.60M | 262.51M | 187.18M | -252.61M | 148.08M | EBITDA |
| 483.60M | 503.70M | 426.87M | 312.35M | -116.89M | 280.54M | Net Income Common Stockholders |
| 85.10M | 126.90M | 137.10M | 108.70M | -206.97M | 100.26M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 21.59M | 37.30M | 181.59M | 25.91M | 11.89M | 24.66M | Total Assets |
| 1.27B | 3.75B | 3.76B | 2.35B | 2.35B | 2.37B | Total Debt |
| 378.47M | 3.00B | 2.86B | 1.75B | 1.86B | 1.85B | Net Debt |
| 356.88M | 2.96B | 2.68B | 1.73B | 1.85B | 1.83B | Total Liabilities |
| 885.35M | 3.50B | 3.35B | 2.07B | 2.20B | 2.20B | Stockholders Equity |
| 387.84M | 251.20M | 410.54M | 275.46M | 153.23M | 169.65M |
| Cash Flow | Free Cash Flow | ||||
| -182.30M | 34.00M | 210.24M | 190.93M | -132.24M | 60.85M | Operating Cash Flow |
| 300.60M | 364.20M | 444.47M | 283.13M | -49.22M | 288.95M | Investing Cash Flow |
| -481.80M | -329.10M | -1.05B | -91.47M | -81.96M | -227.29M | Financing Cash Flow |
| 125.80M | -179.40M | 762.81M | -177.64M | 118.42M | -58.59M |
Dave & Busters Entertainment Technical Analysis
Negative
19.30
Price Trends
25.78
Negative
30.75
Negative
34.12
Negative
Market Momentum
-2.05
Positive
29.28
Positive
15.30
Positive
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 19.3 is below the 20-day moving average (MA) of 22.74, below the 50-day MA of 25.78, and below the 200-day MA of 34.12, indicating a bearish trend. The MACD of -2.05 indicates Positive momentum. The RSI at 29.28 is Positive, neither overbought nor oversold. The STOCH value of 15.30 is Positive, 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $2.49B | 15.06 | 41.18% | 2.20% | 4.13% | 56.76% | |
73 Outperform | $6.19B | 24.55 | 2390.91% | ― | 13.67% | 69.41% | |
66 Neutral | $417.19M | 84.39 | 1.73% | 0.56% | -1.53% | -80.10% | |
61 Neutral | $754.27M | 9.53 | 38.89% | ― | 1.26% | -23.41% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
56 Neutral | $398.58M | 6.20 | -42.81% | 7.81% | -2.27% | 24.95% |
* Communication Services Sector Average
Performance Comparison
PLAY
Dave & Busters Entertainment
19.30
-41.85
-68.44%
EAT
Brinker International
141.37
93.33
194.28%
DIN
Dine Brands Global
26.13
-19.62
-42.89%
RICK
RCI Hospitality Holdings
46.66
-8.40
-15.26%
CAKE
Cheesecake Factory
49.16
13.76
38.87%
Dave & Busters Entertainment Earnings Call Summary
Earnings Call Date: Dec 10, 2024 | % Change Since: -47.55% | Next Earnings Date: Apr 8, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant progress in strategic initiatives and financial performance improvements compared to 2019, despite some challenges with comparable store sales declines and a net loss in the third quarter. The positive momentum in remodels, share repurchases, and strategic initiatives outweigh the lowlights.Highlights
Strong Revenue and EBITDA Growth
Generated revenue of $467 million and adjusted EBITDA of $82 million, both slightly below last year but significantly above 2019 levels.
Expansion of Adjusted EBITDA Margins
Adjusted EBITDA margins increased by 390 basis points compared to 2019, nearly double the previously communicated goal of 200 basis points.
Successful Strategic Initiatives
Key growth initiatives in marketing, pricing, food and beverage, remodels, and special events showing positive results, with plans for broader rollout.
Remodel Program Success
The remodel of the Friendswood store exceeded expectations with a double-digit sales uplift and over 30% sales uplift compared to 2019.
Significant Share Repurchases
Repurchased $100 million worth of shares in the third quarter, totaling 17.5% of shares outstanding year-to-date in 2023.
Lowlights
Pro Forma Comparable Store Sales Decline
Comparable store sales decreased by 7.8% versus 2022, although up by 8.1% compared to 2019.
Net Loss in Third Quarter
Reported a net loss of $5.2 million or $0.12 per diluted share.
Impact of Challenging Comparisons
Operating in a complex macroeconomic environment with challenging comparisons to the prior year due to robust post-COVID demand.
Company Guidance
During the Dave & Buster's Third Quarter 2023 Earnings Conference Call, the company provided guidance on their financial and strategic initiatives. They reported third-quarter revenue of $467 million and adjusted EBITDA of $82 million, which, although slightly below the previous year, showed significant growth compared to 2019 figures, even after accounting for the acquisition of Main Event. The company highlighted a 390 basis point improvement in adjusted EBITDA margins relative to 2019, almost doubling their previously targeted 200 basis point improvement. They emphasized progress in their six key organic growth initiatives, including marketing optimization, strategic game pricing, enhanced food and beverage offerings, remodels, special events, and technology enablement. Dave & Buster's also reported positive developments in their special events sector, with a 4.8% year-over-year increase in comparable sales and confidence in surpassing 2019 levels in the fourth quarter. They continue to focus on cost efficiency, expansion, and strategic investments, including the planned opening of 16 new stores in fiscal 2023, 15 new locations in 2024, and an accelerated remodel plan aiming for 40 to 45 stores by the end of 2024. Additionally, the company remains committed to achieving a $1 billion adjusted EBITDA target and is confident in the long-term growth and shareholder value creation through these initiatives.Dave & Busters Entertainment Corporate Events
Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Dave & Buster’s Strategic Board Appointment and Agreement
Positive
Feb 3, 2025
On January 30, 2025, Dave & Buster’s Entertainment, Inc. announced the appointment of Scott I. Ross, the Founder and Managing Partner of Hill Path Capital, to its Board of Directors. This appointment, part of a Letter Agreement with Hill Path, is designed to leverage Ross’s extensive experience in consumer and entertainment businesses to drive growth and shareholder value. Ross will also serve on the Board’s Nominating and Corporate Governance Committee and Finance Committee. Hill Path has agreed to support the company’s nominees and proposals at the 2025 Annual Meeting, aligning their interests with the company’s strategic initiatives.
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.