One-glance verdict
Overvalued
$-36.49 our estimate vs market $6.62
Wall Street consensus: $13.00 (-135.6% lower than our fair-value estimate)
118% below our estimate, beyond the bull case
Fundamentals snapshot
Dave & Buster's Entertainment, Inc.
PLAY · NMS · Communication Services · Entertainment
Current price
$6.62
52-week range
$6.45 - $22.10
Market cap
$230.58M
Balance sheet
Distressed
0.72x Concerning
Net debt $3.57B. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
3 Risks
1 rewards · 3 risks
- Reward Free cash flow was positive in 8/10 years.
- Risk Return on equity was -69.7% last year — the company lost money on shareholders' equity.
- Risk Net debt grew 17.4% over 3 years.
- Risk Operating margin compressed from 14.1% to 4.4% over 3 years.
What this company does
Dave & Buster's Entertainment, Inc.
Dave & Buster's operates large entertainment venues that are part restaurant, part bar, and part video arcade for adults and families. While they sell food and drinks, the company makes most of its money from the games, which have much higher profit margins (the percentage of each sale that the company keeps as profit). This means the company's success depends on attracting customers with the fun atmosphere to get them spending on both entertainment and dining.
How the company got here
The story began in the late 1970s in Little Rock, Arkansas, where Dave Corriveau ran an entertainment parlor next to Buster Corley's restaurant. [11, 12] They noticed customers often went between their two spots, which sparked the idea to combine them under one roof. In 1982, they opened the first Dave & Buster's in Dallas, a massive location combining a restaurant, bar, and an arcade for adults. [8, 12] The concept was a hit and expanded, eventually becoming a public company whose stock (ownership shares) could be bought and sold by the public. A major turning point came in 2022 when Dave & Buster's completed an acquisition (the process of one company buying another) of Main Event Entertainment for $835 million, adding a more family-focused brand to its portfolio. [2, 3, 9]
What it actually does
Dave & Buster's operates in the "eatertainment" industry, which is a simple idea: mixing dining with entertainment in one large venue. [11] Customers can have a full meal, get drinks from a bar, and play a wide variety of games all in the same visit. The company owns and operates locations across North America under two different brand names: Dave & Buster's and Main Event. [1] While both offer food, drinks, and fun, they are designed to appeal to slightly different groups of people. [2, 6]
Dave & Buster's
This is the company's original brand, primarily aimed at young adults. [2] The main attraction is the "Million Dollar Midway," a large arcade filled with classic and modern video games, virtual reality, and games of skill where you can win tickets for prizes. [11, 12] These locations also feature large sports bars with many TVs for watching games, along with a full restaurant and bar menu. This part of the business makes money by selling food and drinks, as well as from customers buying "Power Cards" to play the games. [7, 23]
Main Event
Acquired in 2022, the Main Event brand is designed to appeal more to families and large groups. [1, 2] While it also has arcade games, the main attractions are often larger-scale activities like bowling, laser tag, billiards, and gravity ropes courses. [1, 20] Like its sister brand, Main Event has its own restaurant and bar, making it a popular destination for birthday parties and corporate events. [1, 7] This segment generates revenue (the money a company brings in from sales) from selling these activities, food, and beverages, often as part of event packages. [19]
What management is betting on now
The company's current strategy focuses on improving the experience at its existing locations to attract more visitors. [6, 22] Management is working to make the two brands, Dave & Buster's and Main Event, feel more distinct from each other to serve their different target customers better. [6] They are also investing in remodeling older stores and launching new, culturally relevant games to keep the experience fresh. [22] Finally, the company is looking to grow by opening new locations in the U.S. and expanding internationally by partnering with local operators in a franchise model (where a local partner pays to use the company's brand and business system). [18, 22]
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q3
$-138.40M
FY2025 Q4
$-61.00M
FY2026 Q1
$-58.80M
FY2026 Q2
$-55.20M
FY2026 Q3
$-20.60M
FY2026 Q4
$34.00M
FY2027 Q1
$8.50M
FY2027 Q2
$-37.90M
Revenue
$544.10M
Net income
$-12.50M
Diluted EPS
-0.36
Operating cash flow
$46.80M
Free cash flow
$-37.90M
Fetching…
Sources
Revenue
$559.20M
Net income
$5.70M
Diluted EPS
0.16
Operating cash flow
$113.80M
Free cash flow
$8.50M
Fetching…
Sources
Revenue
$529.50M
Net income
$-39.70M
Diluted EPS
-1.12
Operating cash flow
$103.00M
Free cash flow
$34.00M
Fetching…
Sources
Revenue
$448.20M
Net income
$-42.10M
Diluted EPS
-1.22
Operating cash flow
$58.00M
Free cash flow
$-20.60M
Fetching…
Sources
Revenue
$557.40M
Net income
$11.40M
Diluted EPS
0.32
Operating cash flow
$34.00M
Free cash flow
$-55.20M
Fetching…
Sources
Revenue
$567.70M
Net income
$21.70M
Diluted EPS
0.62
Operating cash flow
$95.80M
Free cash flow
$-58.80M
Fetching…
Sources
Revenue
$534.50M
Net income
$9.30M
Diluted EPS
0.32
Operating cash flow
$108.90M
Free cash flow
$-61.00M
Fetching…
Sources
Revenue
$453.00M
Net income
$-32.70M
Diluted EPS
-0.84
Operating cash flow
$-7.20M
Free cash flow
$-138.40M
Fetching…
Sources
Is it cheap or expensive?
Fair value $-36.49 vs current price $6.62
Wall Street consensus is the average analyst price target: $13.00 (-135.6% lower than our fair-value estimate).
Our most-likely fair value is $-36.49 a share — about 651.3% below today's price of $6.62, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Distressed
Net debt $3.6B. Interest coverage 0.7x.
Net debt
$3.57B
Interest coverage
0.72x
Dave & Buster's Entertainment, Inc.'s profit covers its interest bill about 0.7 times over. which is stronger than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
PLAY
BASELINE
Dave & Buster's Entertainment, Inc.
Total debt $3.59B Interest coverage 0.72x This is the baseline the peer rows are being compared against.
Total debt $5.16B Interest coverage 0.51x -29% vs PLAY Carries about 1.4x less debt cushion than PLAY.
Total debt $502.38M Interest coverage 0.51x -29% vs PLAY Carries about 1.4x less debt cushion than PLAY.
Total debt $1.92B Interest coverage 2.44x +238% vs PLAY Carries about 3.4x more debt cushion than PLAY.
What you should know
The case for and against PLAY
1 Reward
3 Risks
Rewards
-
Free cash flow was positive in 8/10 years.
Risks
-
Return on equity was -69.7% last year — the company lost money on shareholders' equity.
-
Net debt grew 17.4% over 3 years.
-
Operating margin compressed from 14.1% to 4.4% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
—
Forward P/E
-4.81x
P/B
2.62x
P/S
0.11x
EV/EBITDA
10.26x
PEG ratio
—
Profitability
How much profit each dollar creates
Gross margin
38.3%
Operating margin
4.4%
Net margin
-4.3%
ROE
-69.7%
ROA
1.1%
Health
Liquidity and balance-sheet strength
Debt / equity
40.80x
Current ratio
0.30x
Quick ratio
0.15x
Total debt
$3.59B
Total cash
$16.00M
Growth
How the business has been compounding
Revenue TTM
$2.08B
Revenue 5Y CAGR
106.0%
EPS TTM
-2.56
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$321.60M
Free CF TTM
$-100.60M
FCF margin
-4.8%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2020-01-09