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Dave & Buster’s (PLAY) Gains But Lags Market: What You Should Know


Dave & Buster’s (PLAY) closed at $55.60 in the latest trading session, marking a +0.31% move from the prior day. The stock lagged the S&P 500′s daily gain of 0.58%. Meanwhile, the Dow gained 0.45%, and the Nasdaq, a tech-heavy index, added 1.13%.

Coming into today, shares of the owner of Dave & Buster’s, a chain of restaurants and arcades had gained 11.69% in the past month. In that same time, the Retail-Wholesale sector lost 2.95%, while the S&P 500 lost 2.34%.

PLAY will be looking to display strength as it nears its next earnings release. In that report, analysts expect PLAY to post earnings of $1.12 per share. This would mark year-over-year growth of 7.69%. Our most recent consensus estimate is calling for quarterly revenue of $369.47 million, up 11.22% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.06 per share and revenue of $1.39 billion, which would represent changes of +4.44% and +10.19%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for PLAY. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. PLAY is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, PLAY is holding a Forward P/E ratio of 18.1. Its industry sports an average Forward P/E of 22.86, so we one might conclude that PLAY is trading at a discount comparatively.

Investors should also note that PLAY has a PEG ratio of 1.22 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The Retail – Restaurants industry currently had an average PEG ratio of 2.05 as of yesterday’s close.

The Retail – Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 151, which puts it in the bottom 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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