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1. Company Snapshot

1.a. Company Description

Dave & Buster's Entertainment, Inc.owns and operates entertainment and dining venues for adults and families in North America.Its venues offer a menu of entrées and appetizers, as well as a selection of non-alcoholic and alcoholic beverages; and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events.


The company operates its venues under the Dave & Buster's name.As of January 30, 2022, it owned and operated 144 stores located in 40 states, Puerto Rico, and one Canadian Province.The company was founded in 1982 and is headquartered in Coppell, Texas.

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1.b. Last Insights on PLAY

The recent 3 months performance of Dave & Buster's Entertainment, Inc. was negatively driven by dismal contributions from food and beverage and entertainment segments, resulting in revenue lag. The company's fiscal fourth-quarter revenues were impacted by disruptions due to remodeling construction at certain locations, leading to a decline in comparable sales. Additionally, the company's share buybacks have been criticized for being poorly timed, given its high leverage and negative free cash flow.

1.c. Company Highlights

2. Dave & Buster’s 2025 Q4: Margins Hold, Cash Flow Wins

In fiscal 2025, Dave & Buster’s posted $530 million in revenue, a $40 million net loss, and $111 million in adjusted EBITDA, driving a 21% margin. Earnings per diluted share fell to $‑1.15, trailing the $0.39 consensus, as Tarun Lal noted the “back‑to‑basics strategy” continues to gain traction.

Publication Date: Apr -15

📋 Highlights
  • 6-Month Same-Store Sales Growth: Excluding Winter Storm Fern, 6 consecutive fiscal months of same-store sales improvement, with January 2026 showing 90 bps sequential growth.
  • Free Cash Flow Target: Aiming to generate over $100 million in free cash flow FY2026, driven by disciplined cost management and $103 million in Q4 operating cash flow.
  • Remodel ROI Outperformance: Remodeled stores outperformed non-remodeled locations by 700 basis points, with a revamped remodel program delivering attractive returns.
  • 2026 CapEx Reduction: Planned capital expenditures capped at $200 million (vs. $270 million in 2025), supporting $100+ million free cash flow while funding 11 new store openings.
  • Adjusted EBITDA Margin: 21% adjusted EBITDA margin in Q4 FY2025 ($111 million), with guidance for margin improvement in FY2026 despite 3.3% comp sales decline (1.5% adjusted for weather).

Revenue and Profitability

Quarterly revenue of $530 million reflected a 3.3% decline in comparable sales, though excluding Winter Storm Fern the dip narrowed to 1.5%. Adjusted net loss of $12 million was largely due to $24 million of incremental depreciation, with a forecasted normalization to $75 million per quarter in FY 26.

Same‑Store Sales Momentum

Despite weather headwinds, same‑store sales improved for six consecutive fiscal months, with January up 90 basis points YoY. The company’s focus on new games and immersive experiences—such as Stranger Things and World Cup titles—has begun to lift foot traffic and bolster unit performance.

Capital Expenditure and Cash Flow

Capital spending hit $270 million, driven by $200 million in new store development and $70 million in remodels. Operating cash flow rose to $103 million, leaving $17 million in cash and $483 million in liquidity, while a $650 million revolving credit line remains available to support expansion.

New Store and Game Strategy

Management plans 11 new stores in FY 26, generating an estimated 280 incremental operating weeks. The rollout of at least 10 new attractions, coupled with a revamped remodel program that outperforms non‑remodeled sites by ~700 bps, underpins the company’s growth thesis.

Cost Management and Depreciation

Tarun Lal emphasized disciplined cost control, targeting a $200 million CapEx ceiling in FY 26 and a comprehensive initiative to identify material savings. The company expects to convert operating cash flow to free cash flow, projecting over $100 million in FY 26, which will help reduce leverage and return capital to shareholders.

Valuation Snapshot

Current multiples reflect a negative P/E of –9.65, an EV/EBITDA of 10.13, and a P/S of 0.22. Despite a 21% EBITDA margin, the company’s ROIC sits at 2.0% and ROE at –36.41%, indicating room for improvement in capital efficiency as it pursues aggressive expansion.

Outlook and Risks

Guidance for FY 26 foresees positive comps and margin improvement, yet external factors such as gas prices and consumer sentiment remain potential headwinds. The firm’s focus on internal initiatives—marketing discipline, training, and high‑ROI remodels—should mitigate inflationary pressures and sustain growth momentum.

3. NewsRoom

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Dave & Buster's Announces Board of Directors Transition

May -01

Source: globenewswire.com

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Dave & Buster’s Announces Board of Directors Transition

May -01

Source: globenewswire.com

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Dave & Buster's Entertainment Inc (PLAY) Stock Down 3.0% -- Now Undervalued? GF Score: 74/100

Apr -20

Source: gurufocus.com

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Bear of the Day: Dave & Buster's (PLAY)

Apr -17

Source: zacks.com

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Why Dave & Buster's Stock Is Ripping Higher Despite Ugly Earnings

Apr -05

Source: marketbeat.com

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Contrasting Dutch Bros (NYSE:BROS) and Dave & Buster’s Entertainment (NASDAQ:PLAY)

Apr -03

Source: defenseworld.net

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Why Dave & Buster's Stock Surged Today

Apr -01

Source: fool.com

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Dave & Buster's Entertainment: Why I'm Waiting And Downgrading My Price Target

Apr -01

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.54%)

6. Segments

Entertainment

Expected Growth: 9%

Dave & Buster's Entertainment, Inc.'s 9% growth in the Entertainment segment is driven by increasing demand for experiential entertainment, successful menu innovation, and strategic marketing efforts. Additionally, the company's focus on enhancing the guest experience through technology integration and remodels has contributed to higher sales and profitability.

Food

Expected Growth: 8%

Dave & Buster's Entertainment, Inc.'s 8% food segment growth is driven by increasing demand for experiential dining, successful menu innovation, and expansion of online ordering and delivery capabilities. Additionally, the company's focus on improving food quality, enhancing the guest experience, and investing in digital marketing initiatives contribute to the growth.

Beverage

Expected Growth: 7%

Dave & Buster's Entertainment, Inc.'s 7% growth in Beverage segment is driven by increasing demand for premium beverages, expansion of menu offerings, and strategic pricing. Additionally, the company's focus on enhancing the guest experience through innovative drink options and loyalty programs contributes to the growth.

7. Detailed Products

Food and Beverages

Dave & Buster's offers a wide variety of food and beverages, including burgers, sandwiches, salads, and appetizers, as well as a full bar with cocktails and other drinks.

Games and Entertainment

Dave & Buster's features a wide range of interactive games, including arcade games, sports games, and prize redemption games.

Events and Parties

Dave & Buster's offers private event spaces and catering services for corporate events, birthday parties, and other celebrations.

Sports Viewing

Dave & Buster's features large screens and projection TVs for watching live sports, including football, basketball, baseball, and more.

8. Dave & Buster's Entertainment, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Dave & Buster's Entertainment, Inc. faces moderate threat from substitutes, as customers have alternative options for entertainment, such as movie theaters, bowling alleys, and home-based gaming. However, the company's unique combination of food, drinks, and entertainment provides a differentiated experience that sets it apart from substitutes.

Bargaining Power Of Customers

Dave & Buster's Entertainment, Inc. has a low bargaining power of customers, as individual customers have limited negotiating power. The company's large customer base and diversified revenue streams also reduce the bargaining power of individual customers.

Bargaining Power Of Suppliers

Dave & Buster's Entertainment, Inc. has a low bargaining power of suppliers, as the company has a diversified supply chain and is not heavily dependent on a single supplier. The company's scale and purchasing power also give it an advantage in negotiating with suppliers.

Threat Of New Entrants

Dave & Buster's Entertainment, Inc. faces a moderate threat from new entrants, as the entertainment and hospitality industry is relatively easy to enter. However, the company's established brand, scale, and operational expertise create barriers to entry for new competitors.

Intensity Of Rivalry

Dave & Buster's Entertainment, Inc. operates in a highly competitive industry, with intense rivalry among entertainment and hospitality companies. The company must continually innovate and differentiate itself to maintain market share and competitiveness.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 84.37%
Debt Cost 5.16%
Equity Weight 15.63%
Equity Cost 14.35%
WACC 6.59%
Leverage 539.97%

11. Quality Control: Dave & Buster's Entertainment, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 3.0/10

Value: 6.0

Growth: 5.9

Quality: 2.5

Yield: 0.0

Momentum: 1.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

10.8$

Current Price

10.8$

Potential

-0.00%

Expected Cash-Flows