Why Dave & Buster's (PLAY) Stock Is Trading Lower Today

What Happened?

Shares of arcade company Dave & Buster’s (NASDAQ:PLAY) fell 3.1% in the afternoon session after Truist Securities lowered its price target on the stock ahead of the company's upcoming earnings report.

The analyst firm reduced its price target to $27.00 from $29.00 while maintaining a "Hold" rating. The adjustment stems from expectations that Dave & Buster's will miss its second-quarter 2025 sales and adjusted EBITDA estimates when it reports results, which is anticipated in early September. According to Truist's analysis, improvements in same-store sales seen early in the second quarter appeared to weaken towards the end of the period and into the third quarter.

The firm also noted there are no clear near-term sales catalysts for the company. This follows a first quarter where the company also failed to meet analyst expectations for revenue and earnings, adding to investor concerns about its performance.

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What Is The Market Telling Us

Dave & Buster’s shares are extremely volatile and have had 47 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 5 days ago when the stock gained 4% on the news that a broad market rally fueled by signals of an imminent interest-rate cut from the Federal Reserve. Federal Reserve Chair Jerome Powell's speech signaled a potential interest-rate cut in September, sparking the strongest cross-asset rally since April. This dovish shift in focus toward the jobs market sent major indices soaring, with the S&P 500 climbing 1.7% and the Russell 2000 index of smaller companies jumping 4%. The broad positive market sentiment provided a significant tailwind for stocks like Dave & Buster's.

Adding to the upbeat mood, the company announced the grand opening of a new 22,000 sq. ft. location in Mumbai, India, marking another milestone in its international expansion strategy.

Dave & Buster's is down 16.7% since the beginning of the year, and at $25.26 per share, it is trading 39.9% below its 52-week high of $42.02 from November 2024. Investors who bought $1,000 worth of Dave & Buster’s shares 5 years ago would now be looking at an investment worth $1,675.

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