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Dave & Buster's (PLAY) Outpaces Stock Market Gains: What You Should Know

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Dave & Buster's (PLAY - Free Report) closed the most recent trading day at $58, moving +0.73% from the previous trading session. This change outpaced the S&P 500's 0.47% gain on the day. Elsewhere, the Dow gained 0.31%, while the tech-heavy Nasdaq added 0.34%.

Prior to today's trading, shares of the owner of Dave & Buster's, a chain of restaurants and arcades had gained 15.25% over the past month. This has outpaced the Retail-Wholesale sector's gain of 5.21% and the S&P 500's gain of 4.67% in that time.

Investors will be hoping for strength from PLAY as it approaches its next earnings release. On that day, PLAY is projected to report earnings of $1.12 per share, which would represent year-over-year growth of 7.69%. Meanwhile, our latest consensus estimate is calling for revenue of $369.47 million, up 11.22% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.06 per share and revenue of $1.39 billion. These totals would mark changes of +4.44% and +10.16%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for PLAY. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 2.57% higher. PLAY currently has a Zacks Rank of #3 (Hold).

In terms of valuation, PLAY is currently trading at a Forward P/E ratio of 18.81. Its industry sports an average Forward P/E of 23.02, so we one might conclude that PLAY is trading at a discount comparatively.

Also, we should mention that PLAY has a PEG ratio of 1.27. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Restaurants industry currently had an average PEG ratio of 2.07 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 165, which puts it in the bottom 36% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow PLAY in the coming trading sessions, be sure to utilize Zacks.com.


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