Benchmark maintains Hold on Dave & Buster’s, sees risks ahead

On Monday, Benchmark analysts maintained their Hold rating for Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) while not providing an updated price target. The firm pointed to several factors that could pose risks to the company’s financial performance in the near term, including the timing of its remodel openings, holiday scheduling, and the recent California wildfires.

The analysts anticipate that Dave & Buster’s will release its fiscal fourth quarter and full-year 2024 results in April 2025. They have expressed concern over potential downside risks to the company’s fourth quarter and first half of 2025 results, as Dave & Buster’s navigates a leadership transition and begins implementing a new strategic plan. Despite expectations of a new CEO being in place by the time of the earnings call, an official announcement is not predicted until mid-year.

Dave & Buster’s is in the process of refreshing its entertainment offerings, with plans to introduce 8-10 new games. Benchmark views this as a positive step towards revitalizing consumer excitement around the brand’s entertainment experience, which is central to its business model.

Furthermore, Benchmark suggests that Dave & Buster’s may need to increase its capital expenditures to stay current and competitive. This would involve updating around 20% of the average 120 game cabinets found at each location, indicating a substantial investment in the company’s gaming assets.

The company’s efforts to refresh its game lineup and strategic adjustments come at a time when it is also dealing with external challenges and internal changes. As such, investors and stakeholders will be closely monitoring the upcoming financial disclosures and strategic moves from Dave & Buster’s in the months ahead.

In other recent news, Dave & Buster’s Entertainment, Inc. has been in the spotlight with a series of developments. The company announced the appointment of Scott Ross, a recognized finance expert, to its Board of Directors. Ross, known for his experience in consumer and entertainment businesses, is expected to contribute to the company’s growth strategy.

In a move to enhance shareholder value, Dave & Buster’s expanded its share repurchase program by an additional $100 million. The decision reflects the company’s confidence in the long-term value of its stock and is part of its ongoing financial strategy.

Analyst firms have also weighed in on Dave & Buster’s recent performance. Loop Capital reduced its price target for the company to $45 while maintaining a Buy rating, following lower than expected earnings and revenue in the third quarter of the fiscal year 2024. BMO Capital also adjusted its price target, reducing it to $47, but maintained an Outperform rating, expressing optimism about the company’s remodeling efforts. Benchmark, however, retained a Hold rating amid strategic challenges and the departure of the company’s CEO, Chris Morris.

These latest developments reflect the dynamic nature of Dave & Buster’s ongoing business operations and strategic initiatives.

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