Gold prices bounce off 3-week lows; demand likely longer term
Investing.com - Truist Securities maintained its Hold rating and $29.00 price target on Dave & Buster’s (NASDAQ:PLAY) stock Thursday, citing ongoing competitive pressures facing the entertainment and dining chain.
The research firm identified competitive intrusion as a "significant headwind" for Dave & Buster’s, estimating it created approximately 200 basis points of same-store sales pressure in 2024, only slightly less than the 220 basis points impact seen in 2019.
Truist expects competitive pressure to ease somewhat in 2025 but remain substantial at approximately 150 basis points, suggesting the company’s new management team will need to strengthen its competitive advantages to maintain positive long-term same-store sales growth.
The firm maintained its adjusted EBITDA estimates of $479.3 million for 2025 and $524.5 million for 2026, compared to consensus estimates of $484.4 million and $522.4 million, respectively.
Truist’s $29 price target represents an enterprise value to EBITDA multiple of approximately 5.0 times 2026 estimates, which is below Dave & Buster’s three-year average of 5.5 times, reflecting macroeconomic pressures and uncertainty surrounding the company’s strategic direction.
In other recent news, Dave & Buster’s reported first-quarter earnings that fell short of analyst expectations, with adjusted earnings per share at $0.76, below the anticipated $1.01, and revenue at $567.7 million, missing the forecasted $573.25 million. Despite these results, Loop Capital reiterated its buy rating, citing substantial EBITDA upside potential and raising its price target to $46. UBS and Truist Securities also increased their price targets to $29, reflecting improved industry valuations and strategic progress. The company is focusing on a "back to basics" initiative, which has shown signs of improving sales trends, with comparable sales declining 2.2% quarter-to-date in the second quarter. Analysts from Piper Sandler and BMO raised their price targets as well, emphasizing the company’s strategic initiatives. Additionally, Dave & Buster’s announced the promotion of Les Lehner to Chief Development Officer, succeeding John Mulleady, who is retiring. The company plans to open approximately 40 new stores over the next three years. Despite the challenging macroeconomic environment, analysts see potential for positive same-store sales, indicating a possible turnaround.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.