Dave & Buster’s Leisure ‘stays materially undervalued’

Raymond James analyst Brian Vaccaro reiterated a Robust Purchase ranking and $55 per share value goal on Dave & Buster’s Leisure (PLAY) in a word to shoppers Monday forward of the corporate’s F3Q22 earnings launch scheduled for December 6.

Vaccaro stated the agency believes the inventory is undervalued, whereas they see the corporate reporting a strong third quarter and upside in fiscal This fall.

“Count on robust F3Q comps (D&B +15%) and see upside to F4Q consensus gross sales (RJE $549M vs. consensus $531M). Our evaluation of third social gathering site visitors information helps our F3Q comp estimate (assumes August unfold held for remainder of quarter), whereas QTD developments in November seem like in the same vary regardless of lapping harder multi-year comparisons (possible helped by return of Eat n’ Play promotion),” the analyst wrote.

Raymond James additionally sees PLAY’s adjusted EBITDA margins recovering and exceeding 2019 ranges by ~200 bp.

“[We] Imagine PLAY stays materially undervalued with a FY23 EV/EBITDA within the mid-5s, which doesn’t appear in keeping with the corporate’s robust margin profile (mid-teens EBIT margins) and excessive single-digit % unit development exiting the pandemic,” the analyst added.

Dave & Buster’s shares rose virtually 2% in Monday’s session. Up to now, in 2022, the inventory is up 2%.

By Sam Boughedda