Dave & Busters Entertainment (PLAY) AI Stock Analysis

• Market Cap: $895.17M
• Dividend Yield: N/A
• Average Volume (3M): 811.91K
• Price to Earnings (P/E): 25.6
• Beta (1Y): 0.86
• Revenue Growth: -3.82%
• EPS Growth: -56.18%
• Country: US
• Employees: 23,420
• Sector: Communication Services
• Sector Strength: 91
• Industry: Entertainment
• EPS (TTM): 0.62
• Shares Outstanding: 34,576,046
• 10 Day Avg. Volume: 675,993
• 30 Day Avg. Volume: 811,907
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 4.64
• Enterprise Value/Revenue: 1.97
• Enterprise Value/Gross Profit: 4.33
• Enterprise Value/Ebitda: 9.98
• 1Y Price Target: $33.88
• Price Target Upside: 30.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 57 Neutral
• Price Target: $26.00 ▲(0.42% Upside)

Dave & Busters Entertainment's overall stock score is primarily impacted by financial challenges, including high leverage and declining profitability. Technical analysis indicates bearish trends, while valuation metrics suggest the stock is fairly valued. Positive sentiment from the earnings call and strategic corporate events provide some optimism for future performance.

Positive Factors

Financial Performance

Recent improvements in traffic trends indicate that the 'Back-to-Basics' initiatives are resonating well with consumers.

Growth Potential

Dave & Buster's plans to open 10 to 12 new stores and complete 16 remodels, reflecting a commitment to growth and enhancement of its locations.

Leadership and Strategy

Dave & Buster's announced Tarun Lal as CEO, bringing over 25 years of experience from Yum! Brands, which could help reinvigorate the brand.

Negative Factors

Competition and Market Environment

Risks affecting the stock include competition, low customer visit frequency, and inflationary labor cost pressures.

Earnings and Valuation

EBITDA missed estimates, impacted by lower sales, higher pre-opening given timing, incremental repairs and maintenance, utilities, and marketing spend.

Sales and Revenue Challenges

Despite some stabilization, the year-over-year revenue decline and negative same-store sales indicate challenges in the current market environment.

Dave & Busters Entertainment Business Overview & Revenue Model

Company Description

Dave & Buster's Entertainment, Inc. (traded as PLAY) is a leading restaurant and entertainment company that operates a chain of venues combining dining, arcade games, and sports viewing. Founded in 1982, the company offers a unique experience that includes a full-service restaurant, a bar, and a wide variety of interactive games and attractions. Its core products and services cater to families, friends, and corporate groups seeking a fun and engaging environment for entertainment and socializing.

How the Company Makes Money

Dave & Buster's generates revenue primarily through two key streams: food and beverage sales, and amusement and entertainment sales. The food and beverage segment includes the sale of a diverse menu featuring appetizers, entrees, desserts, and a wide selection of alcoholic and non-alcoholic beverages. The amusement segment derives income from the operation of arcade games, virtual reality experiences, and other entertainment attractions, which typically require the purchase of game cards or tokens. Additionally, the company benefits from hosting corporate events, birthday parties, and special occasions, which can lead to group bookings and event packages. Strategic partnerships with game developers and suppliers also enhance its offerings and may provide financial incentives or support. Seasonal promotions and loyalty programs further boost customer engagement and repeat business, contributing to overall earnings.

Dave & Busters Entertainment Financial Statement Overview

Summary

Dave & Buster's faces challenges with declining revenues and high financial leverage. Profitability margins have decreased, and while operating cash flow efficiency has improved, the lack of data on free cash flow is concerning.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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
EBITDA	443.40M	503.70M	426.87M	312.35M	-116.89M
Net Income	58.30M	126.90M	137.10M	108.70M	-206.97M
Balance Sheet
Total Assets	4.02B	3.75B	3.76B	2.35B	2.35B
Cash, Cash Equivalents and Short-Term Investments	6.90M	37.30M	181.59M	25.91M	11.89M
Total Debt	3.14B	3.00B	2.86B	1.75B	1.86B
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: 25.89
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 25.89 is below the 20-day moving average (MA) of 25.92, below the 50-day MA of 29.39, and below the 200-day MA of 26.37, indicating a bearish trend. The MACD of -1.18 indicates Negative momentum. The RSI at 46.30 is Neutral, neither overbought nor oversold. The STOCH value of 60.13 is Neutral, 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
MCS	63 Neutral	$472.66M	35.00	3.30%	1.88%	13.28%	―
CNK	61 Neutral	$2.98B	14.36	70.99%	0.93%	13.80%	109.00%
Sector *	60 Neutral	$43.56B	3.79	-13.01%	4.09%	1.89%	-42.25%
PLAY	57 Neutral	$895.17M	25.57	17.57%	―	-3.82%	-56.18%
AMC	51 Neutral	$1.48B	―	20.03%	―	9.42%	39.83%
MSGE	50 Neutral	$1.86B	51.92	1222.83%	―	-1.72%	-75.17%
BATRA	49 Neutral	$2.78B	―	-4.06%	―	6.51%	65.80%

Dave & Busters Entertainment Corporate Events

Dave & Buster’s Appoints Tarun Lal as New CEO

On July 14, 2025, Dave & Buster’s Entertainment appointed Tarun Lal as CEO and Board member, effective immediately, succeeding Interim CEO Kevin Sheehan, who remains Chairman. Lal, with over 25 years at Yum! Brands, is expected to drive growth and shareholder value. The company also adopted an Inducement Plan to attract new employees, reserving 2 million shares for equity awards, aligning with its 2025 Omnibus Incentive Plan.

Dave & Buster’s Shareholders Approve Key Proposals at Annual Meeting

On June 18, 2025, Dave & Buster’s Entertainment held its Annual Meeting where several key proposals were voted on by shareholders. The company’s board of directors was re-elected, KPMG LLP was ratified as the independent public accounting firm for the fiscal year, executive compensation was approved, and the 2025 Omnibus Incentive Plan was also approved, indicating continued shareholder support for the company’s strategic initiatives.

Dave & Buster’s Announces CDO Transition Plan

On June 13, 2025, Dave & Buster’s Entertainment, Inc. announced the upcoming retirement of John Mulleady, its Chief Development Officer, effective October 23, 2025. Mr. Mulleady will transition to a Senior Advisor role on June 30, 2025, to ensure a smooth transition and will continue to provide consulting services until January 31, 2026. This transition involves an amended employment agreement, detailing consulting fees and supplemental payments, while Mr. Mulleady adheres to non-compete and non-solicitation covenants. The announcement reflects the company’s strategic planning for leadership transitions, potentially impacting its operational continuity and stakeholder relations.