After Dave & Buster's Entertainment, Inc.'s (NASDAQ:PLAY) earnings announcement on 03 February 2019, the consensus outlook from analysts appear somewhat bearish, with profits predicted to rise by -1.5% next year compared with the higher past 5-year average growth rate of 43%. By 2020, we can expect Dave & Buster's Entertainment’s bottom line to reach US$115m, a jump from the current trailing-twelve-month of US$117m. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Dave & Buster's Entertainment in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
How will Dave & Buster's Entertainment perform in the near future?
Over the next three years, it seems the consensus view of the 11 analysts covering PLAY is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of PLAY's earnings growth over these next few years.
This results in an annual growth rate of 3.9% based on the most recent earnings level of US$117m to the final forecast of US$141m by 2022. This leads to an EPS of $3.73 in the final year of projections relative to the current EPS of $3. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 9.3% to 8.2% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Dave & Buster's Entertainment, I've put together three essential aspects you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Dave & Buster's Entertainment worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Dave & Buster's Entertainment is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Dave & Buster's Entertainment? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.