Dave & Buster’s (NASDAQ:PLAY) stock was up over 4% in yesterday’s extended trade following its report of mixed results for the first quarter of Fiscal 2023 (ended April 30, 2023). Investors were delighted by the company’s favorable year-over-year comparisons for the reported quarter and its ongoing endeavors to expand its global footprint.
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PLAY provides entertainment and dining services at its 210 venues located in North America. It also operates in Canada and Puerto Rico.
PLAY revenues increased 32.4% year-over-year to $597.3 million but missed the Street’s expectations of $603.9 million. The upside can be attributed to a 31.4% jump in Entertainment revenues and a 34.4% rise in Food and beverage revenues.
Meanwhile, Dave & Buster’s earnings of $1.45 per share surpassed the consensus estimate of $1.26 per share and improved from the year-ago figure of $1.35 per share.
Compared with the year-ago quarter, PLAY’s comparable store sales, including Main Event branded stores, were down 4.1%. Interestingly, the sales have increased by 10.3% from the pre-pandemic level in 2019.
During the fiscal first quarter, the company launched a new store in Puerto Rico, along with three additional Main Event stores. Moreover, PLAY is actively enhancing its global reach through the signing of two international franchise agreements. These agreements pave the way for the opening of up to 15 stores in India and about five stores in Australia, further solidifying the company’s international presence.
Is PLAY a Buy or Sell?
The company’s growth strategy, which includes building a presence both domestically and internationally along with driving comparable store sales, bodes well for long-term growth. Moreover, its efforts to reduce costs could help expand margins and improve cash flow.
Additionally, PLAY’s strong cash position supports its capital deployment moves. For Fiscal 2023, the company has up to $100 million remaining under its current repurchase authorization.
Overall, Wall Street is optimistic about PLAY stock, with a Strong Buy consensus rating based on six Buys and two Holds. The average price target of $52.14 suggests upside potential of 54.5%.
Investors looking for the most accurate and profitable analyst for PLAY could follow Jefferies analyst Andy Barish. Copying the analyst’s trades on this stock and holding each position for one year could result in 61% of your transactions generating a profit, with an average return of 12.76% per trade.
