Dave & Buster’s Entertainment, Inc. (Nasdaq: Play) isn’t the biggest company out there, but it’s gotten a lot of attention over the past few months with its wild price swings on the Nasdaq stock exchange, rising as high as $43.93 before falling to a low of $33.42. Some stock price movement can provide investors with a better opportunity to get into a stock and potentially buy it at a lower price. One question that needs to be answered is whether Dave & Buster’s Entertainment’s current trading price of $33.42 reflects the actual value of the small cap? Or is it currently undervalued, presenting us with a buying opportunity? Let’s take a look at Dave & Buster’s Entertainment’s outlook and value based on the latest financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Dave & Buster’s Entertainment
What is the entertainment value of Dave & Buster?
Based on my discounted cash flow valuation, Dave & Buster’s Entertainment currently appears to be 34% overvalued. The stock’s current market price is $33.42, and my intrinsic value is $24.98. Not the best news for investors looking to buy! However, is there still a chance to buy low in the future? Since Dave & Buster’s Entertainment’s stock price is highly volatile, this could mean it could fall (or rise further) in the future, presenting us another investment opportunity. This is based on its high beta, which is a good indicator of how much a stock is moving relative to the rest of the market.
Can we expect growth from Dave & Buster’s Entertainment?
Investors looking for portfolio growth may wish to consider a company’s prospects before purchasing its stock. Acquiring a great company with a strong outlook on the cheap is always a good investment, so let’s also look at what to expect from the company going forward. With profits expected to grow 34% over the next few years, the future looks bright for Dave & Buster’s Entertainment. It looks like the stock may have increased cash flow, which should lead to a higher stock valuation.
what this means to you
Are you a shareholder? The market appears to have priced in PLAY’s positive outlook well and truly, with shares trading above their fair value. At current prices, shareholders might be asking a different question – should I sell? If you believe that PLAY should be trading below its current price, it may be profitable to sell high and buy it again when its price falls to its actual value. But before you make that decision, see if its fundamentals have changed.
Are you a potential investor? If you’ve been following PLAY for a while, now might not be the best time to get in. The price has exceeded its true value, which means that mispricing does no good. However, the bullish outlook is encouraging for PLAY, which means it’s worth digging into other factors in order to take advantage of the next price drop.
With this in mind, understanding the risks involved is crucial if you want to do more analysis on the company.Case in point: we found 1 warning sign from Dave & Buster’s Entertainment You should know.
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Find out if Dave & Buster’s Entertainment is potentially overvalued or undervalued by reviewing our comprehensive analysis which includes Fair value estimates, risks and caveats, dividends, insider trading and financial health.
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This article by Simply Wall St is general in nature. We use only an unbiased methodology to provide reviews based on historical data and analyst forecasts, and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or your financial situation. Our goal is to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no positions in any of the stocks mentioned.