More Trouble Keeps Brewing at Dave & Buster's

After Dave & Buster’s Entertainment Inc. (NASDAQ: PLAY) released its most recent quarterly results late on Tuesday, the stock hit a 52-week low—a level not seen since late 2016—on Wednesday. This despite management citing that it had a record performance for the quarter. Analysts were not optimistic.

The company said that it had $0.61 in earnings per share (EPS) on $304.9 million in revenue, in line with consensus estimates of $0.61 in EPS on revenue of $305 million. In the same period of last year, the company said it had EPS of $0.63 and $270.2 million in revenue.

During the quarter, comparable store sales decreased 5.9%. Dave & Buster’s also opened five new stores in this time.

CEO Steve King commented:

2017 was another outstanding year for us as we delivered double-digit revenue, Net Income and EBITDA growth. Our primary growth vehicle and the biggest driver of value continues to be opening stores that offer excellent returns in the face of a more intense competitive environment. However, recent sales trends in our comparable stores have been disappointing and we are working diligently to re-build momentum by evolving the brand.

In terms of the analysts, Canaccord Genuity maintained a Buy rating ahead of the virtual reality launch, with a $60 price target. The firm believes that additional patience is required, but the risk/reward remains favorable.

Here’s what other analysts had to say after the report:

  • BMO has an Outperform rating and cut its price target to $49 from $60‍.
  • Jefferies has a Buy rating and cut its price target from $63 to $51.
  • Maxim cut its price target to $62 from $74‍.
  • Raymond James cut its price target from $55 to $52.50.
  • SunTrust Robinson Humphrey cut its target to $54 from $70.

Shares of Dave & Buster’s were last seen down about 3% at $39.33, with a consensus analyst price target of $62.22 and a 52-week trading range of $37.85 to $73.48.