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Piper Sandler raised its price target on Dave & Buster’s (NASDAQ:PLAY) to $30.00 from $22.00 on Wednesday, while maintaining a Neutral rating on the entertainment and dining chain.
The price target increase follows Dave & Buster’s fiscal first-quarter 2025 earnings report, which showed same-store sales declined 8.3% during the period, falling short of analyst expectations.
Despite the quarterly miss, Piper Sandler highlighted the company’s improving monthly sales trajectory, with same-store sales declines moderating from 11.9% in February to 8.4% in March, 4.3% in April, and just 2.2% in the second quarter to date.
During its earnings call, Dave & Buster’s management attributed the improving sales trends to several "back to basics" initiatives, particularly its return to television advertising and more effective use of its Eat & Play combo offerings.
Piper Sandler acknowledged that while Dave & Buster’s still faces significant challenges, the firm expects the stock to react positively to the improving sales momentum.
In other recent news, Dave & Buster’s reported its first-quarter 2025 financial results, revealing earnings per share of $0.76, which missed the forecasted $1.01. The company’s total revenue for the quarter amounted to $568 million, slightly exceeding the consensus projection of $567 million but falling short of the anticipated $573.25 million. The entertainment and dining chain also saw a decline in comparable store sales by 8.3%, which was worse than expected. Despite the earnings miss, Loop Capital raised its price target for Dave & Buster’s stock from $35.00 to $46.00, maintaining a Buy rating, citing early positive trends in the second quarter as a contributing factor. The company’s adjusted EBITDA reached $136 million, slightly below expectations, with a 24% margin. Dave & Buster’s plans to open 10-12 new stores in FY2025, with capital expenditures not to exceed $220 million. The company continues to focus on innovative strategies, such as new game cabinets and attractions, to drive future growth. Additionally, Dave & Buster’s is implementing a robust store manager incentive plan to encourage same-store sales growth.
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