Stock Analysis

At US$33.42, Is It Time To Put Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) On Your Watch List?

NasdaqGS:PLAY

Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY), is not the largest company out there, but it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$43.93 at one point, and dropping to the lows of US$33.42. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Dave & Buster's Entertainment's current trading price of US$33.42 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Dave & Buster's Entertainment’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Dave & Buster's Entertainment

What Is Dave & Buster's Entertainment Worth?

Dave & Buster's Entertainment appears to be overvalued by 34% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$33.42 on the market compared to my intrinsic value of $24.98. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Since Dave & Buster's Entertainment’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Dave & Buster's Entertainment?

NasdaqGS:PLAY Earnings and Revenue Growth May 26th 2023

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 34% over the next couple of years, the future seems bright for Dave & Buster's Entertainment. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in PLAY’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe PLAY should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on PLAY for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for PLAY, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Case in point: We've spotted 1 warning sign for Dave & Buster's Entertainment you should be aware of.

If you are no longer interested in Dave & Buster's Entertainment, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Valuation is complex, but we're helping make it simple.

Find out whether Dave & Buster's Entertainment is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.