Back to top

Is Dave & Buster's (PLAY) Stock Undervalued Right Now?

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is Dave & Buster's (PLAY - Free Report) . PLAY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 18.77, which compares to its industry's average of 23.31. PLAY's Forward P/E has been as high as 22.15 and as low as 13.93, with a median of 17.30, all within the past year.

We also note that PLAY holds a PEG ratio of 1.27. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PLAY's PEG compares to its industry's average PEG of 1.78. Within the past year, PLAY's PEG has been as high as 1.49 and as low as 0.94, with a median of 1.17.

Finally, investors should note that PLAY has a P/CF ratio of 9.92. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. PLAY's current P/CF looks attractive when compared to its industry's average P/CF of 15.51. Over the past year, PLAY's P/CF has been as high as 11.53 and as low as 6.82, with a median of 9.03.

These are only a few of the key metrics included in Dave & Buster's's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, PLAY looks like an impressive value stock at the moment.

Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Dave & Buster's Entertainment, Inc. (PLAY) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in