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Dave & Buster's (PLAY) Gains But Lags Market: What You Should Know

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Dave & Buster's (PLAY) closed the most recent trading day at $38.44, moving +1% from the previous trading session. This change lagged the S&P 500's 2.47% gain on the day. Elsewhere, the Dow gained 1.76%, while the tech-heavy Nasdaq added 0.71%.

Coming into today, shares of the owner of Dave & Buster's, a chain of restaurants and arcades had lost 18.68% in the past month. In that same time, the Retail-Wholesale sector lost 10.74%, while the S&P 500 lost 2.59%.

Investors will be hoping for strength from Dave & Buster's as it approaches its next earnings release. In that report, analysts expect Dave & Buster's to post earnings of $1.19 per share. This would mark year-over-year growth of 197.5%. 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.

It is also important to note the recent changes to analyst estimates for Dave & Buster's. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Dave & Buster's is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Dave & Buster's is holding a Forward P/E ratio of 11.4. This represents a discount compared to its industry's average Forward P/E of 20.49.

Investors should also note that PLAY has a PEG ratio of 0.76 right now. 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. The Retail - Restaurants was holding an average PEG ratio of 1.8 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 190, putting it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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Dave & Buster's Entertainment, Inc. (PLAY) : Free Stock Analysis Report
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