Dave & Busters Entertainment (PLAY) AI Stock Analysis

• Market Cap: $507.37M
• Dividend Yield: N/A
• Average Volume (3M): 922.12K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.98
• Revenue Growth: -4.07%
• EPS Growth: -100.72%
• Country: US
• Employees: 23,420
• Sector: Communication Services
• Sector Strength: 97
• Industry: Entertainment
• EPS (TTM): -1.22
• Shares Outstanding: 34,680,264
• 10 Day Avg. Volume: 971,900
• 30 Day Avg. Volume: 922,120
• PEG Ratio: -0.36
• Price to Book (P/B): 7.12
• Price to Sales (P/S): 0.49
• P/FCF Ratio: -4.76
• Enterprise Value/Market Cap: 7.30
• Enterprise Value/Revenue: 1.76
• Enterprise Value/Gross Profit: 5.54
• Enterprise Value/Ebitda: 9.19
• 1Y Price Target: $25.00
• Price Target Upside: 66.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 0.87
• Revenue Forecast (FY): $2.23B

• Rating: 42 Neutral
• Price Target: $15.00 ▲(0.07% Upside)
• Action: Reiterated Date: 02/21/26
• Date: Action: Reiterated 02/21/26

The score is held down primarily by deteriorating TTM financial performance (sharp revenue decline, near-zero profitability, and negative free cash flow) combined with high balance-sheet leverage and a thin equity buffer. Technicals are also weak with the stock trading below major moving averages and negative MACD. The latest earnings call adds some support via sequential sales improvement and product/promo traction, but ongoing comp declines and a quarterly net loss limit confidence.

Positive Factors

Diversified revenue streams

Dave & Buster's multi-pronged model (restaurant, arcade games, events) creates diversified, recurring revenue sources that reduce dependence on any single segment. This cross-selling ability supports steady guest spend and helps stabilize cash flows across economic cycles, aiding long-term resilience.

Operational improvements & product innovation

Management's rollout of a new menu, Eat & Play promos, and in-store sales managers are structural changes that raise guest spend and attach rates. If sustained, these initiatives can lift unit economics, drive same-store sales recovery, and improve unit-level margins over multiple quarters.

Positive operating cash flow and liquidity

Positive operating cash flow and substantial liquidity provide a buffer to fund operations, promotions, and working capital while management executes recovery plans. This cash generation and available liquidity improve near-term solvency and give time to restore margins and sales without immediate capital raises.

Negative Factors

Sharp revenue decline

A large, persistent revenue decline erodes operating leverage and pressures margins; reversing a ~22.7% TTM drop requires sustained customer re-engagement across locations. Prolonged top-line weakness makes margin recovery and debt servicing materially harder over coming quarters.

Very high leverage and thin equity

Extremely elevated leverage with a shrinking equity base reduces financial flexibility and raises refinancing and solvency risk. Large interest and principal obligations constrain capital allocation, increasing vulnerability to sustained revenue or margin pressure and limiting strategic investment capacity.

Negative free cash flow and recent net losses

Negative free cash flow combined with quarterly net losses undermines the firm's ability to de-lever and invest without external financing. Continued negative FCF increases reliance on liquidity or capital markets and heightens execution risk if operating improvements don't quickly restore positive cash generation.

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 generates revenue through multiple streams, primarily from food and beverage sales, game play, and special events. The company's core revenue comes from its full-service restaurant and bar, where it offers a diverse menu of appetizers, entrees, and a wide selection of alcoholic and non-alcoholic beverages. In addition to dining, Dave & Buster's earns significant income from its extensive arcade and gaming operations, where customers purchase game play cards for access to various games and attractions. Special events, such as birthday parties and corporate gatherings, also contribute to revenue, often including catering and exclusive gaming experiences. The company has established partnerships with various game developers and brands, which help enhance its gaming offerings and attract a broader customer base. Overall, the combination of food, drink, and entertainment creates a unique experience that drives customer traffic and revenue growth.

Dave & Busters Entertainment Financial Statement Overview

Summary

TTM fundamentals have weakened materially: revenue is down sharply (-22.7%), net margin is near breakeven, and free cash flow is negative (-$196M TTM) after being positive in 2022–2024. The balance sheet adds risk with very high leverage (debt-to-equity ~11.9x) and a thin/shrinking equity base, leaving limited cushion if demand or margins remain pressured.

Income Statement

TTM (Trailing-Twelve-Months) results show a sharp revenue decline (-22.7%) and profitability has compressed materially: EBIT margin is ~7.1% and net profit margin is effectively breakeven (~0.0%), despite still-solid EBITDA margin (~19.1%). Annual history shows the business can be meaningfully profitable (2022–2024 net margins ~5.8%–8.3%), but the latest TTM deterioration and recent annual revenue softness (2025 down ~3.3%) weigh on the outlook.

Balance Sheet

Leverage is very high relative to the equity base, with TTM debt-to-equity around ~11.9x and total debt (~$3.20B) far exceeding stockholders’ equity (~$131M). Equity has also trended down from 2023–2025, reducing balance-sheet cushion. While total assets remain sizable (~$4.13B TTM), the combination of elevated leverage and thin equity leaves limited room for operating volatility.

Cash Flow

Operating cash flow remains positive in TTM (~$297M) but has weakened versus prior years, and free cash flow is negative in TTM (-$196M) and 2025 (-$218M) after being positive in 2022–2024. This shift suggests heavier reinvestment and/or reduced cash generation from operations, and it increases reliance on financing flexibility at a time when earnings are near zero.

Breakdown	TTM	Jan 2025	Jan 2024	Jan 2023	Jan 2022	Jan 2021
Income Statement
Total Revenue	2.11B	2.13B	2.21B	1.96B	1.30B	436.51M
Gross Profit	668.20M	1.82B	723.90M	1.66B	1.10B	361.61M
EBITDA	402.70M	443.40M	491.90M	426.87M	325.53M	-116.89M
Net Income	300.00K	58.30M	126.90M	137.10M	108.70M	-206.97M
Balance Sheet
Total Assets	4.13B	4.02B	3.75B	3.76B	2.35B	2.35B
Cash, Cash Equivalents and Short-Term Investments	13.60M	6.90M	37.30M	181.59M	25.91M	11.89M
Total Debt	3.20B	3.14B	3.00B	2.86B	1.75B	1.86B
Total Liabilities	4.00B	3.87B	3.50B	3.35B	2.07B	2.20B
Stockholders Equity	130.80M	145.80M	251.20M	410.54M	275.46M	153.23M
Cash Flow
Free Cash Flow	-195.60M	-217.90M	34.00M	210.24M	190.93M	-132.24M
Operating Cash Flow	296.70M	312.30M	364.20M	444.47M	283.13M	-49.22M
Investing Cash Flow	-487.80M	-529.80M	-329.10M	-1.05B	-91.47M	-81.96M
Financing Cash Flow	196.10M	187.10M	-179.40M	762.81M	-177.64M	118.42M

Dave & Busters Entertainment Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.99
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 14.99 is below the 20-day moving average (MA) of 17.31, below the 50-day MA of 17.73, and below the 200-day MA of 21.54, indicating a bearish trend. The MACD of -0.96 indicates Positive momentum. The RSI at 37.00 is Neutral, neither overbought nor oversold. The STOCH value of 13.73 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$471.24M	66.81	1.68%	1.97%	6.28%	―
CNK	61 Neutral	$2.96B	24.62	27.31%	1.45%	9.70%	-31.62%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
AMCX	54 Neutral	$313.52M	5.50	9.73%	―	-7.38%	-483.59%
SBGI	53 Neutral	$979.75M	-22.05	-11.81%	6.52%	-0.98%	82.16%
AMC	44 Neutral	$619.57M	-0.89	―	―	9.74%	12.29%
PLAY	42 Neutral	$507.37M	-433.24	0.17%	―	-4.07%	-100.72%