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Bull of the Day: Dave & Buster's Entertainment (PLAY)
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Founded in 1982 and headquartered in Dallas, TX, Dave & Buster’s Entertainment (PLAY - Free Report) is a leading owner and operator of high-volume venues that combine dining and entertaining. The core concept of the company is “Eat Drink Play and Watch,” all in one location, and it has two main operating segments: Food and Beverage (33.5% of total revenues in fiscal 2021) and Amusement and Other revenues (66.5%).
Q4 Earnings Recap
Shares of Dave & Buster’s surged as much as 14.5% the day after the company released fiscal 2021 fourth-quarter results last month.
Revenue shot up 194% to $343.1 million, and full-year sales improved by 199% versus full-year 2020. While the company’s top line still lags pre-pandemic levels in 2019, revenue has mostly recovered.
The same trends apply to earnings. PLAY generated $0.52 per share for Q4 compared to a loss of $1.19 per share in 2020 and a profit of $0.80 in Q4 2019.
But it was the outlook for same-store sales that drove the stock higher. The company said that same-store sales grew by 5.4% through the first eight weeks of 2022, suggesting Dave & Buster’s may finally be back on a growth path.
Investors were unsurprisingly excited by this development, as well as the fact that Dave & Buster’s was able to show strength during a period that was bogged down by the omicron coronavirus variant
Can PLAY Surge Higher?
Year-to-date, shares of PLAY have gained about 27% compared to the S&P 500’s loss of 6.4%, but earnings estimates have climbed higher, making the restaurant chain a Zacks Rank #1 (Strong Buy) right now.
For the current fiscal year, six analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up from $2.70 per share to $3.30 per share. Earnings and sales are expected to increase 49.3% and 24.4%, respectively for 2022, with 2023 continuing the positive growth trend.
“[Dave & Buster’s} has significant upside potential and with our continued focus on innovation, growth and value creation, we are driving toward unlocking that value. We are optimistic about the future and look forward to sharing our ongoing progress with everyone,” said interim CEO Kevin Sheehan.
Wall Street is feeling bullish on Dave & Buster’s too.
Jeffries analyst Andy Barish reiterated his buy recommendation on PLAY last week, with a $60 price target. He believes the company’s recent $835 million acquisition of Main Event, which specializes in family entertainment venues, “will allow for more growth in strong [Dave & Buster's] markets such as the West Coast and East Coast given [the company's] domain knowledge and relatively limited exposure in those markets for Main Event,” he told investors in a research note.
If you’re an investor searching for a restaurant stock to add to your portfolio, make sure to keep PLAY on your shortlist.
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Bull of the Day: Dave & Buster's Entertainment (PLAY)
Founded in 1982 and headquartered in Dallas, TX, Dave & Buster’s Entertainment (PLAY - Free Report) is a leading owner and operator of high-volume venues that combine dining and entertaining. The core concept of the company is “Eat Drink Play and Watch,” all in one location, and it has two main operating segments: Food and Beverage (33.5% of total revenues in fiscal 2021) and Amusement and Other revenues (66.5%).
Q4 Earnings Recap
Shares of Dave & Buster’s surged as much as 14.5% the day after the company released fiscal 2021 fourth-quarter results last month.
Revenue shot up 194% to $343.1 million, and full-year sales improved by 199% versus full-year 2020. While the company’s top line still lags pre-pandemic levels in 2019, revenue has mostly recovered.
The same trends apply to earnings. PLAY generated $0.52 per share for Q4 compared to a loss of $1.19 per share in 2020 and a profit of $0.80 in Q4 2019.
But it was the outlook for same-store sales that drove the stock higher. The company said that same-store sales grew by 5.4% through the first eight weeks of 2022, suggesting Dave & Buster’s may finally be back on a growth path.
Investors were unsurprisingly excited by this development, as well as the fact that Dave & Buster’s was able to show strength during a period that was bogged down by the omicron coronavirus variant
Can PLAY Surge Higher?
Year-to-date, shares of PLAY have gained about 27% compared to the S&P 500’s loss of 6.4%, but earnings estimates have climbed higher, making the restaurant chain a Zacks Rank #1 (Strong Buy) right now.
For the current fiscal year, six analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up from $2.70 per share to $3.30 per share. Earnings and sales are expected to increase 49.3% and 24.4%, respectively for 2022, with 2023 continuing the positive growth trend.
“[Dave & Buster’s} has significant upside potential and with our continued focus on innovation, growth and value creation, we are driving toward unlocking that value. We are optimistic about the future and look forward to sharing our ongoing progress with everyone,” said interim CEO Kevin Sheehan.
Wall Street is feeling bullish on Dave & Buster’s too.
Jeffries analyst Andy Barish reiterated his buy recommendation on PLAY last week, with a $60 price target. He believes the company’s recent $835 million acquisition of Main Event, which specializes in family entertainment venues, “will allow for more growth in strong [Dave & Buster's] markets such as the West Coast and East Coast given [the company's] domain knowledge and relatively limited exposure in those markets for Main Event,” he told investors in a research note.
If you’re an investor searching for a restaurant stock to add to your portfolio, make sure to keep PLAY on your shortlist.