Dave & Buster's Entertainment (NASDAQ:PLAY) Downgraded by Zacks Research to "Strong Sell"

Key Points

• Zacks Research downgraded Dave & Buster’s Entertainment to “strong sell” from “hold and cut several earnings forecasts, including projected losses of $1.57 per share for fiscal 2027 and $1.49 for fiscal 2028.
• The company’s latest quarter missed expectations, reporting a $0.27-per-share loss versus an expected $0.19 profit, while revenue fell 2.4% year over year to $544.1 million.
• Shares opened at $6.49, near their 12-month low of $6.38; despite the weak outlook and high leverage, company insiders recently purchased shares, while analysts’ consensus rating remains “hold” with a $17.33 price target.

Dave & Buster's Entertainment (NASDAQ:PLAY - Get Free Report) was downgraded by Zacks Research from a "hold" rating to a "strong sell" rating in a note issued to investors on Monday, Zacks reports. Zacks Research also issued estimates for Dave & Buster's Entertainment's Q3 2027 earnings at ($1.42) EPS, Q4 2027 earnings at ($0.10) EPS, FY2027 earnings at ($1.57) EPS, Q1 2028 earnings at $0.23 EPS, Q2 2028 earnings at ($0.05) EPS, Q3 2028 earnings at ($1.45) EPS, Q4 2028 earnings at ($0.21) EPS, FY2028 earnings at ($1.49) EPS, Q1 2029 earnings at $0.56 EPS, Q2 2029 earnings at ($0.15) EPS and FY2029 earnings at ($0.83) EPS.

A number of other brokerages have also issued reports on PLAY. UBS Group decreased their price target on Dave & Buster's Entertainment from $12.00 to $9.00 and set a "neutral" rating on the stock in a research note on Tuesday, September 15th. Citigroup reaffirmed a "market perform" rating on shares of Dave & Buster's Entertainment in a research report on Tuesday, September 15th. BMO Capital Markets lowered their price objective on shares of Dave & Buster's Entertainment from $22.00 to $13.00 and set an "outperform" rating for the company in a research note on Tuesday, September 15th. Weiss Ratings reaffirmed a "sell (d)" rating on shares of Dave & Buster's Entertainment in a research report on Friday, July 17th. Finally, Citizens Jmp assumed coverage on Dave & Buster's Entertainment in a research report on Monday, June 29th. They set a "market perform" rating for the company. Two analysts have rated the stock with a Buy rating, five have issued a Hold rating and two have given a Sell rating to the company. According to MarketBeat, the company currently has an average rating of "Hold" and a consensus price target of $17.33.

Dave & Buster's Entertainment Price Performance

NASDAQ:PLAY opened at $6.49 on Monday. The company has a current ratio of 0.30, a quick ratio of 0.21 and a debt-to-equity ratio of 17.07. The firm has a market cap of $226.05 million, a price-to-earnings ratio of -2.53 and a beta of 1.82. The company's 50-day moving average is $9.09 and its two-hundred day moving average is $10.79. Dave & Buster's Entertainment has a 12-month low of $6.38 and a 12-month high of $22.10.

Dave & Buster's Entertainment (NASDAQ:PLAY - Get Free Report) last released its earnings results on Monday, September 14th. The restaurant operator reported ($0.27) EPS for the quarter, missing the consensus estimate of $0.19 by ($0.46). The firm had revenue of $544.10 million during the quarter, compared to analysts' expectations of $556.83 million. Dave & Buster's Entertainment had a negative return on equity of 51.87% and a negative net margin of 4.26%.The firm's revenue was down 2.4% on a year-over-year basis. During the same period in the previous year, the firm posted $0.32 earnings per share. Research analysts expect that Dave & Buster's Entertainment will post -1.39 EPS for the current year.

Insider Buying and Selling at Dave & Buster's Entertainment

In other Dave & Buster's Entertainment news, Director Nathaniel Lipman purchased 12,000 shares of the firm's stock in a transaction that occurred on Thursday, September 17th. The stock was purchased at an average cost of $6.78 per share, with a total value of $81,360.00. Following the transaction, the director owned 30,715 shares in the company, valued at approximately $208,247.70. This trade represents a 64.12% increase in their ownership of the stock. The acquisition was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, CFO Cory Hatton acquired 4,000 shares of the business's stock in a transaction on Monday, September 28th. The stock was bought at an average cost of $6.50 per share, for a total transaction of $26,000.00. Following the completion of the transaction, the chief financial officer directly owned 104,475 shares of the company's stock, valued at $679,087.50. This trade represents a 3.98% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. 1.73% of the stock is owned by corporate insiders.

Institutional Trading of Dave & Buster's Entertainment

Several large investors have recently bought and sold shares of the company. Public Employees Retirement System of Ohio bought a new position in shares of Dave & Buster's Entertainment in the 2nd quarter worth about $25,000. Legal & General Group Plc bought a new position in shares of Dave & Buster's Entertainment during the second quarter worth about $28,000. Persistent Asset Partners Ltd acquired a new stake in shares of Dave & Buster's Entertainment in the 2nd quarter worth about $33,000. Caitong International Asset Management Co. Ltd boosted its stake in Dave & Buster's Entertainment by 1,547.2% during the 4th quarter. Caitong International Asset Management Co. Ltd now owns 4,464 shares of the restaurant operator's stock valued at $72,000 after purchasing an additional 4,193 shares during the period. Finally, Headlands Technologies LLC acquired a new stake in shares of Dave & Buster's Entertainment in the second quarter valued at approximately $141,000. Institutional investors and hedge funds own 91.45% of the company's stock.

Key Headlines Impacting Dave & Buster's Entertainment

Here are the key news stories impacting Dave & Buster's Entertainment this week:

• Positive Sentiment: CFO Cory Hatton purchased 4,000 shares at an average price of $6.50, increasing his direct stake by approximately 4%. The insider purchase may signal management confidence that the stock has been oversold. Dave & Buster's Entertainment CFO Cory Hatton Purchases 4,000 Shares of Stock
• Neutral Sentiment: Zacks Research maintained a “Hold” rating, despite making numerous changes to its forecasts. It raised estimates for Q4 2027 EPS to a loss of $0.10 from $0.18 and Q1 2029 EPS to $0.56 from $0.36, but these improvements were outweighed by broader reductions.
• Negative Sentiment: Zacks cut its FY2027 EPS forecast to a loss of $1.57 from $1.18 and reduced FY2028 EPS to a loss of $1.49 from $1.09. It also lowered estimates for Q2 2028, Q3 2028, Q4 2028, Q2 2029 and FY2029, suggesting analysts expect prolonged earnings weakness. Zacks Research Has Pessimistic Opinion of PLAY Q1 Earnings
• Negative Sentiment: Moody’s cut its outlook on Dave & Buster’s to negative, citing a sales slump. The action adds credit-risk concerns for a company with a debt-to-equity ratio above 17 and could weigh on investor confidence. Moody’s cuts Dave & Buster’s outlook to negative on sales slump
• Negative Sentiment: The company’s latest reported quarter included an EPS loss of $0.27 versus expectations for $0.19 of profit, while revenue declined 2.4% year over year and missed estimates. The results reinforce concerns about the turnaround and help explain the stock’s sharp decline from its one-year high.

Dave & Buster's Entertainment Company Profile

Dave & Buster's Entertainment, Inc NASDAQ: PLAY is an entertainment and dining company that operates venues combining arcade games, sports viewing, food and beverages, and social experiences. Its Dave & Buster's locations are designed for adults and families and offer interactive games, prize redemption, casual dining, full-service bars, and space for group events and parties.

The company also operates Main Event, a family entertainment brand offering bowling, arcade games, laser tag, virtual reality attractions, and food and beverages.

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