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Dave & Buster's (PLAY) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

Dave & Buster's (PLAY) closed the most recent trading day at $58.69, moving -0.49% from the previous trading session. This change lagged the S&P 500's 0.96% gain on the day. At the same time, the Dow added 0.75%, and the tech-heavy Nasdaq gained 1.58%.

Prior to today's trading, shares of the owner of Dave & Buster's, a chain of restaurants and arcades had gained 6.94% over the past month. This has outpaced the Retail-Wholesale sector's gain of 3.11% and the S&P 500's gain of 1.85% in that time.

PLAY will be looking to display strength as it nears its next earnings release. In that report, analysts expect PLAY to post earnings of $1.12 per share. This would mark year-over-year growth of 7.69%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $369.47 million, up 11.22% from the year-ago period.

PLAY's full-year Zacks Consensus Estimates are calling for earnings of $3.06 per share and revenue of $1.39 billion. These results would represent year-over-year changes of +4.44% and +10.19%, respectively.

Investors might also notice recent changes to analyst estimates for PLAY. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.27% higher. PLAY currently has a Zacks Rank of #3 (Hold).

Investors should also note PLAY's current valuation metrics, including its Forward P/E ratio of 19.26. For comparison, its industry has an average Forward P/E of 22.99, which means PLAY is trading at a discount to the group.

It is also worth noting that PLAY currently has a PEG ratio of 1.3. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Restaurants was holding an average PEG ratio of 2.08 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 184, putting it in the bottom 29% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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