Dave & Buster’s Entertainment, Inc. (PLAY) Lowered to Hold at Zacks Investment Research

Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research report issued on Tuesday, August 8th.

According to Zacks, “Dave & Buster's shares have outpaced the industry over the past one year. The company’s unique business model with increased dependence on gaming sets it apart and we expect the company’s entertainment business to carry the growth story forward. Consistent efforts to build sales and improve margins through various initiatives have also been key growth drivers. In this regard, continual opening of stores, menu innovation, launch of games, and the Fun American New Gourmet and beverage options are expected to continue boosting its top and bottom lines. In fact, the first quarter of fiscal 2017 marked the tenth successive earnings beat for the company. However, rising labor costs and a non-franchised business model might hurt profits, while a soft consumer spending environment in the U.S. restaurant space could impact comps. Estimates too have been going down ahead of its fiscal second quarter earnings release.”

A number of other analysts have also weighed in on PLAY. SunTrust Banks, Inc. set a $69.00 price objective on Dave & Buster’s Entertainment and gave the company a “buy” rating in a research note on Thursday, April 13th. Jefferies Group LLC reissued a “buy” rating and set a $65.00 price objective on shares of Dave & Buster’s Entertainment in a research note on Thursday, May 18th. Wells Fargo & Company reissued an “outperform” rating and set a $75.00 price objective on shares of Dave & Buster’s Entertainment in a research note on Tuesday, May 30th. Maxim Group reaffirmed a “buy” rating and issued a $72.00 price target on shares of Dave & Buster’s Entertainment in a research note on Friday, June 2nd. Finally, BMO Capital Markets reaffirmed a “buy” rating and issued a $77.00 price target (up previously from $64.00) on shares of Dave & Buster’s Entertainment in a research note on Wednesday, June 7th. One analyst has rated the stock with a sell rating, one has assigned a hold rating and ten have given a buy rating to the company. Dave & Buster’s Entertainment currently has an average rating of “Buy” and a consensus price target of $77.33.

Shares of Dave & Buster’s Entertainment (NASDAQ PLAY) traded down 0.73% on Tuesday, hitting $59.95. 473,843 shares of the stock were exchanged. Dave & Buster’s Entertainment has a 52-week low of $37.60 and a 52-week high of $73.48. The company has a 50 day moving average of $63.63 and a 200 day moving average of $62.62. The company has a market cap of $2.49 billion, a price-to-earnings ratio of 25.37 and a beta of 0.64.

Dave & Buster’s Entertainment (NASDAQ:PLAY) last released its quarterly earnings data on Thursday, June 8th. The restaurant operator reported $0.98 earnings per share for the quarter, beating analysts’ consensus estimates of $0.81 by $0.17. The firm had revenue of $304.15 million during the quarter, compared to analyst estimates of $299.77 million. Dave & Buster’s Entertainment had a return on equity of 22.71% and a net margin of 9.78%. The business’s quarterly revenue was up 16.1% compared to the same quarter last year. During the same quarter in the prior year, the firm posted $0.72 earnings per share. Equities research analysts forecast that Dave & Buster’s Entertainment will post $2.62 earnings per share for the current year.

Dave & Buster’s Entertainment declared that its Board of Directors has approved a stock repurchase plan on Tuesday, June 6th that permits the company to buyback $100.00 million in shares. This buyback authorization permits the restaurant operator to reacquire up to 3.4% of its shares through open market purchases. Shares buyback plans are usually a sign that the company’s management believes its stock is undervalued.

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In other Dave & Buster’s Entertainment news, CEO Stephen M. King sold 75,000 shares of the firm’s stock in a transaction on Thursday, June 8th. The stock was sold at an average price of $71.69, for a total transaction of $5,376,750.00. Following the completion of the transaction, the chief executive officer now owns 37,501 shares of the company’s stock, valued at $2,688,446.69. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this link. Also, COO Margo Lynn Manning sold 10,000 shares of the firm’s stock in a transaction on Wednesday, July 19th. The shares were sold at an average price of $66.46, for a total value of $664,600.00. Following the transaction, the chief operating officer now directly owns 15,447 shares of the company’s stock, valued at approximately $1,026,607.62. The disclosure for this sale can be found here. Insiders have sold 144,186 shares of company stock valued at $10,085,186 in the last three months. Insiders own 5.60% of the company’s stock.

A number of institutional investors have recently made changes to their positions in PLAY. BlackRock Inc. raised its position in shares of Dave & Buster’s Entertainment by 3.2% in the second quarter. BlackRock Inc. now owns 4,571,266 shares of the restaurant operator’s stock valued at $304,033,000 after buying an additional 141,356 shares in the last quarter. Vanguard Group Inc. raised its position in shares of Dave & Buster’s Entertainment by 11.7% in the first quarter. Vanguard Group Inc. now owns 3,912,633 shares of the restaurant operator’s stock valued at $239,022,000 after buying an additional 411,339 shares in the last quarter. Voya Investment Management LLC raised its position in shares of Dave & Buster’s Entertainment by 4.7% in the second quarter. Voya Investment Management LLC now owns 1,048,064 shares of the restaurant operator’s stock valued at $69,707,000 after buying an additional 47,031 shares in the last quarter. Dimensional Fund Advisors LP raised its position in shares of Dave & Buster’s Entertainment by 2.2% in the second quarter. Dimensional Fund Advisors LP now owns 1,033,691 shares of the restaurant operator’s stock valued at $68,751,000 after buying an additional 22,602 shares in the last quarter. Finally, Victory Capital Management Inc. raised its position in shares of Dave & Buster’s Entertainment by 10.5% in the second quarter. Victory Capital Management Inc. now owns 1,005,120 shares of the restaurant operator’s stock valued at $66,851,000 after buying an additional 95,338 shares in the last quarter.

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