Why Dave & Buster's Entertainment Stock Jumped 15% Today

Shares of Dave & Buster's Entertainment (NASDAQ: PLAY) jumped as much as 19.2% on Wednesday, despite a modest earnings report. The stock had cooled down to a 15.4% gain by 1 p.m. ET.

Image source: Getty Images.

Dave & Buster's Q1 by the numbers

The restaurant and video arcade chain saw first-quarter sales fall 3.5% year over year, stopping at $567.7 million. The average Wall Street analyst had expected $573.3 million. On the bottom line, adjusted earnings fell from $1.12 to $0.76 per diluted share. Here, the analyst consensus pointed to $1.01 per share.

Management admitted that the Q1 results were disappointing, but also said that the "back to basics" turnaround plan is making a difference.

"We are improving our execution every day and have a very clear road map of work to do to continue to drive improvements and meaningful growth in the business," interim CEO Kevin Sheehan said in a prepared statement. Sheehan did not follow up with revenue or earnings guidance, but reiterated the full-year spending targets Dave & Buster's offered three months ago.

Investors cheer for the pep talk

That report was more of a rebound than a victory march. Dave & Buster's is experiencing weak foot traffic and sales while operating under a temporary management team, and investors get excited about positive management commentary even if the financial results were disappointing.

Former CEO Chris Morris is now the CEO of European Wax Center instead, where he was hailed as a proven consumer services expert with a strong focus on marketing and day-to-day operations. Dave & Buster's has to fill these large shoes with another star player, and investors had started to give up hope.

But Kevin Sheehan's bullish commentary had a calming effect, and the stock is back where it was at the end of 2024. In the meantime, the company remains profitable. Dave & Buster's valuation is a mixed bag, with lofty multiples based on reported profits but a forward P/E ratio of just 12.1. In other words, analysts expect a robust turnaround story here.

Should you invest $1,000 in Dave & Buster's Entertainment right now?

Before you buy stock in Dave & Buster's Entertainment, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Dave & Buster's Entertainment wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,102!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $882,344!*

Now, it’s worth noting Stock Advisor’s total average return is 996% — a market-crushing outperformance compared to 174% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool recommends Dave & Buster's Entertainment. The Motley Fool has a disclosure policy.