Why Analysts Are Bullish on Dave & Buster’s Stock after Fiscal 4Q17

Ratings summary

After the fiscal 4Q17 results release on April 3, 2018, all ten analysts covering Dave & Buster’s (PLAY) have maintained a “buy” rating. No analyst has given the stock a “hold” or “sell” rating. Dave & Buster’s reported revenue of $304.9 million and adjusted EPS of $0.61 per share for fiscal 4Q17, which topped analyst estimates.

Why Analysts Are Bullish on Dave & Buster’s Stock after Fiscal 4Q17

However, after the earnings release, Jefferies reduced its price target on the stock to $51.00 from $63.00 earlier. There could be more target price revisions in the coming days.

To boost its top line, Dave & Buster’s over the long term has taken up several strategic measures like menu improvements and speedier service. The company is also adding several new game titles including virtual reality games to its portfolio to attract more customers. The company is trying to make its stores attractive to a range of customers including families, sports enthusiasts, and the overall 21–34 age demographic.

Currently, the analysts’ 12-month average target price for the company is $57.17, which reflects a 40.5% upside to the share price as of April 3, 2018.

Where do peers stand?

Out of the 33 analysts covering McDonald’s (MCD), ~30% gave it a “hold” rating with the remaining giving it a “buy” rating. About 48.0% of the 27 analysts covering Darden’s (DRI) recommended a “hold” rating, while 48.0% rated it a “buy.” For Jack in the Box (JACK), ~53.0% of the 17 analysts covering the stock recommended a “hold” rating, while 47.0% rated it a “buy.”

Currently, analysts’ target price for McDonald’s is $187.04, reflecting a 16.6% upside to the stock price as of April 3, 2018. For Darden’s, the mean target price is $100.41, which indicates an 18.7% upside to the stock price as of April 3, 2018. For Jack in the Box, the target price is $103.93, implying a 21.9% upside to the stock price as of April 3, 2018.