Dave & Buster's Entertainment, Inc. Just Missed EPS By 65%: Here's What Analysts Think Will Happen Next

Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) shareholders are probably feeling a little disappointed, since its shares fell 4.7% to US$21.18 in the week after its latest quarterly results. It looks like a pretty bad result, all things considered. Although revenues of US$557m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 65% to hit US$0.32 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Following last week's earnings report, Dave & Buster's Entertainment's ten analysts are forecasting 2026 revenues to be US$2.15b, approximately in line with the last 12 months. Per-share earnings are expected to jump 70% to US$0.48. Before this earnings report, the analysts had been forecasting revenues of US$2.17b and earnings per share (EPS) of US$1.48 in 2026. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

See our latest analysis for Dave & Buster's Entertainment

It might be a surprise to learn that the consensus price target fell 9.6% to US$29.57, with the analysts clearly linking lower forecast earnings to the performance of the stock price. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Dave & Buster's Entertainment, with the most bullish analyst valuing it at US$46.00 and the most bearish at US$22.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Dave & Buster's Entertainment's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 3.4% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10% annually. Factoring in the forecast slowdown in growth, it seems obvious that Dave & Buster's Entertainment is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Dave & Buster's Entertainment. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Dave & Buster's Entertainment's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Dave & Buster's Entertainment going out to 2028, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 3 warning signs for Dave & Buster's Entertainment you should be aware of, and 1 of them makes us a bit uncomfortable.

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.