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Investing.com - Loop Capital maintained its buy rating and $46.00 price target on Dave & Buster’s (NASDAQ:PLAY) stock, citing "substantial EBITDA upside potential" despite recent share price recovery.
The firm expressed continued confidence in the entertainment company’s "Back to Basics" initiative under new leadership, stating it remains bullish on the stock’s prospects. Loop Capital’s price target represents a multiple of approximately 6.5 times its fiscal year 2025 EV/EBITDA estimate, compared to the current EV/EBITDA multiple of 10.03x based on last twelve months EBITDA of $457.8 million.
Dave & Buster’s fiscal first quarter results, reported last week, provided "clear evidence that the platform is off to a very promising start," according to Loop Capital. The firm had previously published a focus report on April 16, 2025, outlining key reasons for its confidence in the company’s strategic direction.
Loop Capital’s latest analysis examines various scenarios for Dave & Buster’s comparable sales during the second half of fiscal year 2025 and fiscal year 2026. The firm believes these projections demonstrate how the company could generate meaningful EBITDA results exceeding current estimates.
The entertainment venue operator has experienced what Loop Capital described as a "recent sharp share price recovery," though the firm maintains the stock still trades at "a still attractive multiple" despite this appreciation.
In other recent news, Dave & Buster’s Entertainment Inc. reported first-quarter results that did not meet analyst expectations, with adjusted earnings per share at $0.76 compared to the anticipated $1.01. The company’s revenue was $567.7 million, falling short of the expected $573.25 million and marking a 3.5% decrease from the previous year. Same-store sales dropped by 8.3% during the quarter, which the company attributed to marketing and operational missteps. Despite these results, analysts have noted improving sales trends, with UBS and BMO Capital raising their price targets to $29 and $35, respectively. Loop Capital also reiterated a Buy rating, increasing its target price to $46, citing positive developments in the company’s strategic initiatives. Dave & Buster’s has been implementing a "Back to Basics" strategy, which has shown early signs of success in improving sales performance. The company also announced the promotion of Les Lehner to Chief Development Officer, following the retirement of John Mulleady. Lehner, with a background in development and procurement, will be responsible for overseeing a pipeline of approximately 40 new stores expected to open over the next three years.
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