Investors Purchase High Volume of Call Options on Dave & Buster's Entertainment (NASDAQ:PLAY)

Key Points

• Unusual options activity: Investors purchased 11,361 call options on Dave & Buster’s, 345% above the typical daily volume of 2,551 contracts.
• Weak financial performance: The company reported quarterly EPS of $0.22, missing the $0.60 consensus estimate, while revenue fell 1.5% year over year to $559.2 million.
• Mixed analyst outlook: Wall Street’s consensus rating is “Hold,” with a $19.33 average price target; institutional investors own 91.45% of the company, despite shares trading near a 12-month low at $8.34.

Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY - Get Free Report) saw some unusual options trading activity on Monday. Stock investors acquired 11,361 call options on the stock. This is an increase of 345% compared to the typical daily volume of 2,551 call options.

Dave & Buster's Entertainment Price Performance

NASDAQ:PLAY traded up $0.20 during trading hours on Monday, hitting $8.34. The company's stock had a trading volume of 1,575,985 shares, compared to its average volume of 1,568,550. Dave & Buster's Entertainment has a twelve month low of $7.94 and a twelve month high of $24.99. The company has a debt-to-equity ratio of 15.01, a current ratio of 0.29 and a quick ratio of 0.20. The stock has a fifty day simple moving average of $9.91 and a 200-day simple moving average of $11.43. The company has a market capitalization of $290.21 million, a P/E ratio of -4.41 and a beta of 1.82.

Dave & Buster's Entertainment (NASDAQ:PLAY - Get Free Report) last issued its earnings results on Monday, June 15th. The restaurant operator reported $0.22 EPS for the quarter, missing the consensus estimate of $0.60 by ($0.38). The business had revenue of $559.20 million for the quarter, compared to analyst estimates of $580.60 million. Dave & Buster's Entertainment had a negative return on equity of 24.19% and a negative net margin of 3.09%.The firm's revenue was down 1.5% compared to the same quarter last year. During the same period in the previous year, the firm posted $0.76 EPS. On average, analysts anticipate that Dave & Buster's Entertainment will post -1.1 EPS for the current fiscal year.

Institutional Trading of Dave & Buster's Entertainment

A number of hedge funds and other institutional investors have recently modified their holdings of PLAY. BlackRock Inc. acquired a new position in shares of Dave & Buster's Entertainment during the second quarter worth $36,725,000. Nomura Holdings Inc. grew its position in Dave & Buster's Entertainment by 532.9% during the 3rd quarter. Nomura Holdings Inc. now owns 2,411,191 shares of the restaurant operator's stock worth $43,787,000 after acquiring an additional 2,030,186 shares during the last quarter. Wolf Hill Capital Management LP bought a new stake in Dave & Buster's Entertainment during the 2nd quarter worth $15,468,694. Arrowstreet Capital Limited Partnership increased its holdings in Dave & Buster's Entertainment by 44.9% in the 1st quarter. Arrowstreet Capital Limited Partnership now owns 1,509,752 shares of the restaurant operator's stock worth $16,351,000 after purchasing an additional 468,174 shares in the last quarter. Finally, MUFG Securities EMEA plc acquired a new position in Dave & Buster's Entertainment in the 4th quarter worth about $7,359,000. Institutional investors own 91.45% of the company's stock.

Wall Street Analyst Weigh In

Several brokerages have recently commented on PLAY. Citigroup assumed coverage on shares of Dave & Buster's Entertainment in a report on Monday, June 29th. They set a "market perform" rating on the stock. Citizens Jmp started coverage on Dave & Buster's Entertainment in a report on Monday, June 29th. They issued a "market perform" rating for the company. Weiss Ratings reiterated a "sell (d)" rating on shares of Dave & Buster's Entertainment in a research report on Friday, July 17th. Zacks Research raised Dave & Buster's Entertainment from a "strong sell" rating to a "hold" rating in a report on Friday, August 28th. Finally, BMO Capital Markets decreased their price target on Dave & Buster's Entertainment from $24.00 to $22.00 and set an "outperform" rating on the stock in a research report on Tuesday, June 16th. Two equities research analysts have rated the stock with a Buy rating, six have given a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat, the stock has an average rating of "Hold" and a consensus price target of $19.33.

About Dave & Buster's Entertainment

Dave & Buster's Entertainment, Inc operates a chain of combined restaurant and entertainment venues designed to appeal to families, young adults and corporate groups. Each location features a full-service restaurant and bar alongside an arcade gaming area with ticket-based redemption, virtual reality experiences and skill-based games. Many venues also include multiple large-screen televisions and a sports bar atmosphere, catering to fans who wish to watch live sporting events in a social setting.

The company was founded in 1982 by David Corriveau and James “Buster” Corley, opening its first location in Dallas, Texas.

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