US$39.71: That's What Analysts Think Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) Is Worth After Its Latest Results

The analysts might have been a bit too bullish on Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY), given that the company fell short of expectations when it released its quarterly results last week. It was a pretty negative result overall, with revenues of US$453m missing analyst predictions by 2.3%. Worse, the business reported a statutory loss of US$0.84 per share, much larger than the analysts had forecast prior to the result. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Dave & Buster's Entertainment

Taking into account the latest results, the current consensus from Dave & Buster's Entertainment's ten analysts is for revenues of US$2.25b in 2026. This would reflect a reasonable 2.6% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 38% to US$3.06. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.31b and earnings per share (EPS) of US$3.47 in 2026. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

The consensus price target fell 18% to US$39.71, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Dave & Buster's Entertainment, with the most bullish analyst valuing it at US$48.00 and the most bearish at US$33.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Dave & Buster's Entertainment's past performance and to peers in the same industry. 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 2.0% growth on an annualised basis. This is compared to a historical growth rate of 22% 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 9.9% 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 most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Dave & Buster's Entertainment going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 4 warning signs with Dave & Buster's Entertainment (at least 1 which can't be ignored) , and understanding them should be part of your investment process.

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.