Dave & Buster's Entertainment (PLAY) stock is struggling for direction Wednesday after the entertainment and restaurant chain reported its second-quarter earnings results.
In the 13 weeks ended August 6, Dave & Buster's revenue increased 2.8% year-over-year to $557.1 million, helped by the addition of 13 net new stores. While its comparable-store sales decreased 6.3%, earnings per share (EPS) were up 19.1% from the year-ago period to $1.12.
"We are pleased with the progress we are making on our strategic initiatives and on the strong financial results achieved during the quarter," said Dave & Buster's CEO Chris Morris in a statement. "During the quarter, we grew revenue and adjusted EBITDA [earnings before interest, taxes, depreciation and amortization], expanded our adjusted EBITDA margins and generated strong operating cash flow which allowed us to invest in the business and return cash to shareholders."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results were mixed compared with what analysts expected. Wall Street was anticipating revenue of $560.6 million and earnings of 86 cents per share, according to MarketWatch.
"While we are disappointed with our same-store sales performance during the quarter in this complex and challenging environment, we are laser focused on our medium-term goals and encouraged by the progress we are making on each of the initiatives," Morris said. "We fully expect the impact of our initiatives to lead to growth in same-store sales, revenue, EBITDA and cash flow in the coming quarters."
Is PLAY stock a buy, sell or hold?
Dave & Buster's shares are down more than 45% for the year to date, but Wall Street is bullish on the consumer discretionary stock.
According to S&P Global Market Intelligence, the average analyst target price for PLAY stock is $52.71, representing implied upside of nearly 80% to current levels. Additionally, the consensus recommendation is Buy.
Speaking for the bulls is financial services firm Jefferies, which has a Buy rating and $60 price target on PLAY stock.
The company is well-positioned to capture share from other entertainment concepts, says Jefferies analyst Andy Barish. The analyst also likes Dave & Buster's strong development opportunity and store economics.
Barish adds that PLAY's long-term operating efficiency potential is underappreciated and its stock is undervalued and trades at a discount to full-service peers.
Related Content
-
Stock Market Today: Stocks Close Mixed Amid War Angst, Nvidia AnxietyMarkets went into risk-off mode amid rising geopolitical tensions and high anxiety ahead of bellwether Nvidia's earnings report.
-
What the Comcast Cable Spinoff Means for InvestorsComcast has announced plans to spin off select cable networks and digital assets into a separate publicly traded company. Here's what you need to know.
-
Stock Market Today: Stocks Close Mixed Amid War Angst, Nvidia Anxiety
Markets went into risk-off mode amid rising geopolitical tensions and high anxiety ahead of bellwether Nvidia's earnings report.
-
What the Comcast Cable Spinoff Means for Investors
Comcast has announced plans to spin off select cable networks and digital assets into a separate publicly traded company. Here's what you need to know.
-
TJX Stock: Wall Street Stays Bullish After EarningsTJX stock is trading lower Wednesday despite the TJ Maxx owner's beat-and-raise quarter, but analysts aren't worried. Here's why.
-
Target Is the Worst S&P 500 Stock After Earnings. Here's WhyTarget stock is down big after the retailer missed expectations for its third quarter and slashed its full-year outlook. Here's what Wall Street is saying.
-
For a More Secure Retirement, Build in Some 'Safe Money'To solidify your retirement plan, write it down, reduce your market risk and allocate more safe money into your plan for income.
-
Five Steps to a Mindfully Fearless CareerIf, like many women, you're struggling with imposter syndrome, try developing an athlete's winning mindset. It's as simple as facing one small fear every day.
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical TensionThe main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
What's at Stake for Alphabet as DOJ Eyes Google's ChromeAlphabet is higher Tuesday even as antitrust officials at the DOJ support forcing Google to sell its popular web browser. Here's what you need to know.
