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Dave & Busters Entertainment (PLAY)
NASDAQ:PLAY
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Dave & Busters Entertainment (PLAY) AI Stock Analysis

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PLAY

Dave & Busters Entertainment

(NASDAQ:PLAY)

Rating:61Neutral
Price Target:
$30.00
▲(6.76%Upside)
The overall stock score of 61 reflects the challenges in financial performance and valuation concerns, balanced by positive developments in earnings call insights and recent corporate events. The financial risks due to high leverage and declining profitability weigh heavily, but strategic initiatives and leadership changes provide a potential pathway to recovery and growth.
Positive Factors
Growth and Expansion
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.
Traffic and Sales Trends
Recent improvements in traffic trends indicate that the 'Back-to-Basics' initiatives are resonating well with consumers.
Negative Factors
Competition and Costs
Risks affecting the stock include competition, low customer visit frequency, and inflationary labor cost pressures.
Financial Performance
EBITDA missed estimates, impacted by lower sales, higher pre-opening given timing, incremental repairs and maintenance, utilities, and marketing spend.
Market 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 (PLAY) vs. SPDR S&P 500 ETF (SPY)

Dave & Busters Entertainment Business Overview & Revenue Model

Company DescriptionDave & 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 MoneyDave & 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 Earnings Call Summary

Earnings Call Date:Jun 10, 2025
(Q1-2025)
|
% Change Since: 8.62%|
Next Earnings Date:Sep 03, 2025
Earnings Call Sentiment Positive
The call reflects a positive outlook due to significant improvements in operational execution and promising results from strategic initiatives, despite some ongoing challenges in same-store sales and high preopening expenses.
Q1-2025 Updates
Positive Updates
Improved Operating Results
The company's operating results significantly improved over the first quarter, driven by the back-to-basics strategy. May saw encouraging results with positive sales during Memorial Day weekend, and positive same-store sales in 11 of the last 30 days.
Successful Marketing Initiatives
Reintroduction of the Eat & Play combo and the introduction of the first-ever Summer Pass have shown promising results, contributing to higher food and beverage sales since April.
Remodel Outperformance
Completed 48 remodels which outperformed the system by over 700 basis points over the last three months, indicating effective investment strategy in store upgrades.
New Store Openings and Relocation Success
Opened four new Dave & Buster's locations and relocated the Honolulu store, which recorded the highest weekly sales ever in the company's history with week 1 sales exceeding $1 million.
International Expansion
Plans to open at least seven more international locations over the next year, with agreements for over 35 additional stores in coming years.
Negative Updates
Same-Store Sales Decline
Comp store sales decreased by 8.3% in the first quarter compared to the prior year, with February seeing comps down 11.9%.
High Preopening Expenses
Increased preopening expenses by $2.7 million compared to the prior year, affecting adjusted EBITDA.
Challenges in Marketing Strategy
Previous marketing efforts were not effective, requiring rebalancing of media spend and simplification of messaging.
Company Guidance
In the Dave & Buster's First Quarter 2025 earnings call, the leadership highlighted significant strides in improving operational performance and the positive impact of their back-to-basics strategy. Despite a first-quarter comp store sales decrease of 8.3%, the company noted a progressive recovery, with a decline of 11.9% in February narrowing to 4.3% by April. This improvement continued into the second quarter, with comps down just 2.2% in the first five weeks. Revenue for the quarter was reported at $568 million, with adjusted EBITDA at $136 million, reflecting a 24% margin. The company's strong financial position was underlined by $96 million in operating cash flow and a net total leverage ratio of 3.1x. Leadership is optimistic about upcoming growth, with plans for 10 to 12 new store openings in fiscal 2025 and continued international expansion. Additionally, strategic initiatives such as the reintroduction of the Eat & Play Combo, a new Summer Pass, and a robust marketing strategy have shown encouraging early results, contributing to the positive trajectory.

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
65
Positive
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
55
Neutral
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
60
Neutral
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.13B2.21B1.96B1.30B436.51M
Gross Profit1.82B723.90M1.66B1.10B361.61M
EBITDA443.40M503.70M426.87M312.35M-116.89M
Net Income58.30M126.90M137.10M108.70M-206.97M
Balance Sheet
Total Assets4.02B3.75B3.76B2.35B2.35B
Cash, Cash Equivalents and Short-Term Investments6.90M37.30M181.59M25.91M11.89M
Total Debt3.14B3.00B2.86B1.75B1.86B
Total Liabilities3.87B3.50B3.35B2.07B2.20B
Stockholders Equity145.80M251.20M410.54M275.46M153.23M
Cash Flow
Free Cash Flow-217.90M34.00M210.24M190.93M-132.24M
Operating Cash Flow312.30M364.20M444.47M283.13M-49.22M
Investing Cash Flow-529.80M-329.10M-1.05B-91.47M-81.96M
Financing Cash Flow187.10M-179.40M762.81M-177.64M118.42M

Dave & Busters Entertainment Technical Analysis

Technical Analysis Sentiment
Negative
Last Price28.10
Price Trends
50DMA
28.92
Negative
100DMA
24.09
Positive
200DMA
27.36
Positive
Market Momentum
MACD
0.07
Positive
RSI
41.76
Neutral
STOCH
10.36
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 28.1 is below the 20-day moving average (MA) of 31.22, below the 50-day MA of 28.92, and above the 200-day MA of 27.36, indicating a neutral trend. The MACD of 0.07 indicates Positive momentum. The RSI at 41.76 is Neutral, neither overbought nor oversold. The STOCH value of 10.36 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$2.77B-4.43%4.04%82.47%
66
Neutral
$455.01M33.623.30%1.88%13.28%
65
Neutral
$2.98B14.2070.99%0.62%13.80%109.00%
62
Neutral
$1.75B13.491222.83%5.81%133.05%
61
Neutral
$971.59M27.7617.57%-3.82%-56.18%
61
Neutral
$41.44B-3.01-11.43%3.97%2.71%-44.19%
49
Neutral
$1.23B20.03%-5.43%26.07%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PLAY
Dave & Busters Entertainment
27.81
-4.55
-14.06%
CNK
Cinemark Holdings
25.87
0.59
2.33%
MCS
Marcus
14.79
2.19
17.38%
AMC
AMC Entertainment
2.87
-2.08
-42.02%
MSGE
Madison Square Garden Entertainment Corp.
36.88
1.09
3.05%
BATRA
Atlanta Braves Holdings Inc Class A
47.22
4.27
9.94%

Dave & Busters Entertainment Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Dave & Buster’s Appoints Tarun Lal as New CEO
Positive
Jul 15, 2025

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.

The most recent analyst rating on (PLAY) stock is a Buy with a $48.00 price target. To see the full list of analyst forecasts on Dave & Busters Entertainment stock, see the PLAY Stock Forecast page.

Shareholder MeetingsBusiness Operations and Strategy
Dave & Buster’s Shareholders Approve Key Proposals at Annual Meeting
Positive
Jun 20, 2025

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.

The most recent analyst rating on (PLAY) stock is a Buy with a $48.00 price target. To see the full list of analyst forecasts on Dave & Busters Entertainment stock, see the PLAY Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Dave & Buster’s Announces CDO Transition Plan
Neutral
Jun 13, 2025

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.

The most recent analyst rating on (PLAY) stock is a Buy with a $48.00 price target. To see the full list of analyst forecasts on Dave & Busters Entertainment stock, see the PLAY Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 02, 2025