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Dave & Buster's (PLAY) Dips More Than Broader Markets: What You Should Know

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Dave & Buster's (PLAY - Free Report) closed the most recent trading day at $35.76, moving -1.32% from the previous trading session. This move lagged the S&P 500's daily loss of 0.58%. Elsewhere, the Dow lost 0.75%, while the tech-heavy Nasdaq added 0.56%.

Heading into today, shares of the owner of Dave & Buster's, a chain of restaurants and arcades had lost 25.28% over the past month, lagging the Retail-Wholesale sector's loss of 19.53% and the S&P 500's loss of 10.53% in that time.

Investors will be hoping for strength from Dave & Buster's as it approaches its next earnings release. The company is expected to report EPS of $1.19, up 197.5% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $440.06 million, up 65.85% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.34 per share and revenue of $1.66 billion, which would represent changes of +51.13% and +27.24%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Dave & Buster's. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.21% higher. Dave & Buster's is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Dave & Buster's is currently trading at a Forward P/E ratio of 10.85. For comparison, its industry has an average Forward P/E of 19.16, which means Dave & Buster's is trading at a discount to the group.

We can also see that PLAY currently has a PEG ratio of 0.72. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Restaurants was holding an average PEG ratio of 1.67 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 192, which puts it in the bottom 24% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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