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Dave & Buster's: Is It Time to Make Another Play on This Stock?
DaveDave(US:DAVE) MarketBeatยท2024-12-15 12:01

Core Viewpoint - Dave & Buster's Entertainment is facing challenges but has potential for recovery with a new CEO, although uncertainty remains due to the recent leadership change [3][4][6]. Financial Performance - Revenue declined by 3% year-over-year in Q3, despite an increase in store count, with a negative 7.7% comparable sales adjusted for calendar shifts [4][5]. - Adjusted EBITDA margin contracted by 240 basis points to 15.1%, resulting in a 16% dollar decline, and the company experienced negative cash flow for the quarter [5][6]. - The company is on track to complete at least 40 remodels by year-end, which is expected to improve performance at remodeled locations [6]. Stock Performance and Analyst Sentiment - The stock price forecast for Dave & Buster's is $53.38, indicating a potential upside of 94.23%, but analysts have downgraded sentiment to "Hold" following recent performance [7][9]. - The stock price fell over 15% after the Q3 release, with high short interest at 16%, indicating bearish sentiment in the market [10]. Strategic Initiatives - The company has been actively repurchasing shares, reducing the count by more than 5% year-to-date, but may slow down or pause buybacks due to negative cash flow [7][8]. - Seasonal trends, a rebound in the events business, and customer satisfaction improvements are expected to drive Q4 sales growth, despite potential shortfalls compared to earlier forecasts [6].