Key Stats for PLAY Stock
- 1- Year Price Change for PLAY stock: -21%
- $PLAY Share Price as of Jan. 16: $19.68
- 52-Week High: $35.53
- $PLAY Share Price Target: $26.22
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What Happened?
Dave & Buster’s (PLAY) stock jumped 2% on Friday after Benchmark upgraded the family entertainment chain to “Buy” from “Hold”. Analyst Mike Hickey set a $30 price target, suggesting 55% upside from current levels.
The upgrade comes as Dave & Buster’s appears poised to post positive same-store sales for the first time in roughly 13 quarters.
Hickey pointed to improvements in food and beverage execution and to strong early traction from the company’s expanded Half Price Games promotion, which launched on January 4.
The company’s “Back to Basics” strategy is showing real results.
- October same-store sales were down just 1% year-over-year, a major improvement from the 4% decline in the full third quarter.
- November trends continued at similar levels, suggesting momentum is building heading into the important holiday season.
CEO Tarun Lal emphasized the progress during the recent earnings call:
“We are making substantive progress on our Back to Basics plan. We’ve been hard at work in our marketing engine, strengthening our food and beverage offering, improving our operations, refreshing our games offering and revamping our remodels.”
The food and beverage turnaround has been impressive.
- Same-store food sales were positive during the quarter, with October posting the best food sales month of the year.
- The company launched a revamped menu in October with more items and fan favorites brought back after successful testing.
- Guest traffic in dining rooms was up meaningfully year-over-year.
Dave & Buster’s brought back its popular Eat & Play combo promotion, and attachment rates have climbed to double-digit percentages since the beginning of the year.
This combo offering bundles food and games at an attractive price point, driving customers to spend across both sides of the business.
On the games front, the company is rolling out its Human Crane game to all remaining Dave & Buster’s locations by year-end, then launching it across Main Event stores in Q1 2026.
These games are generating payback periods of less than a year and creating strong social media buzz on TikTok and Instagram.
CFO Darin Harper addressed the financial strength of PLAY stock: “Our financial foundation remains strong, supported by a business model that consistently generates high returns, healthy unit level performance, disciplined cost management and meaningful free cash flow.”
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What the Market Is Telling Us About PLAY Stock
The upgrade signals growing confidence that Dave & Buster’s has turned a corner after more than three years of negative comps.
- Dave and Buster’s opened 9 new domestic stores year-to-date and is on track to open 11 new stores and relocate 1 in fiscal 2025.
- Special events revenue grew mid-single digits year-over-year in Q3, boosted by the completion of in-store sales manager rollouts.
- The company expects continued year-over-year growth in Q4, an important quarter for corporate bookings and holiday parties.
Management is also getting more disciplined with capital spending. The company invested $268 million gross, or $155 million net of landlord contributions, year-to-date, but is now eliminating inefficient spending while maintaining investment in high-return initiatives.
Dave & Buster’s has launched a revamped remodel program after learning that previous remodels wasted capital on elements that didn’t improve guest experience. The new prototype focuses on areas that directly correlate with repeat visits. Six new remodels are planned over the next five months, with three already under construction.
Despite the progress, PLAY stock faces challenges. The shares are down 43% from their 52-week high amid broader concerns about consumer spending at discretionary entertainment venues.
The company posted a net loss of $42 million or $1.22 per share in Q3, though adjusted EBITDA of $59 million showed the business still generates cash.
Looking ahead to 2026, management expressed confidence in the games pipeline. The company plans to launch more than 10 new games throughout the year, all tied to strong intellectual property and tested with consumers in advance.
The company ended Q3 with $442 million in total liquidity and generated $58 million in operating cash flow.
If PLAY stock can sustain the improved November trends and deliver that first positive comp quarter, Benchmark’s $30 target could prove conservative given the operating leverage in the business model.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
