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Should Value Investors Buy Dave & Buster's (PLAY) Stock?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Dave & Buster's (PLAY - Free Report) . PLAY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 13.55. This compares to its industry's average Forward P/E of 23.98. Over the past year, PLAY's Forward P/E has been as high as 18.78 and as low as 12.03, with a median of 14.62.

PLAY is also sporting a PEG ratio of 0.91. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PLAY's PEG compares to its industry's average PEG of 2.15. Over the past 52 weeks, PLAY's PEG has been as high as 1.27 and as low as 0.81, with a median of 0.99.

Finally, investors will want to recognize that PLAY has a P/CF ratio of 6. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. PLAY's current P/CF looks attractive when compared to its industry's average P/CF of 17.17. Over the past 52 weeks, PLAY's P/CF has been as high as 9.82 and as low as 5.56, with a median of 7.27.

Value investors will likely look at more than just these metrics, but the above data helps show that Dave & Buster's is likely undervalued currently. And when considering the strength of its earnings outlook, PLAY sticks out at as one of the market's strongest value stocks.


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