PLAY Should I Buy
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Dave & Buster's Entertainment Inc (PLAY) is not a strong buy at this moment for a beginner, long-term investor with $50,000-$100,000 to invest. The technical indicators show a bearish trend with oversold conditions, and the financial performance reflects challenges in revenue and gross margin. While hedge funds are increasing their positions, and analysts have mixed views, the lack of recent positive news or strong catalysts makes this stock a hold for now.
The stock is in a bearish trend with MACD negatively expanding (-0.45), RSI at 17.165 indicating oversold conditions, and bearish moving averages (SMA_200 > SMA_20 > SMA_5). Key support is at 15.008, and the stock is trading close to this level in pre-market at $15.55.
Hedge funds are significantly increasing their positions (+139.12% last quarter). Analysts from Benchmark upgraded the stock to Buy with a $30 price target, citing potential for positive same-store sales in Q1 driven by improved execution and promotions.
The company's financials show declining revenue (-1.06% YoY) and gross margin (-1.85% YoY). Analysts from Truist and UBS have lowered their price targets, citing mixed outlooks for the restaurant sector and macroeconomic pressures. The stock has no recent news or significant insider trading activity.
In Q3 2026, revenue dropped by -1.06% YoY to $448.2M, while net income improved by 28.75% YoY to -$42.1M. EPS increased by 45.24% YoY to -1.22, but gross margin declined to 71.78 (-1.85% YoY). Overall, financials show some improvement in profitability metrics but declining top-line growth.
Benchmark upgraded the stock to Buy with a $30 price target, citing potential for positive same-store sales. However, Truist and UBS lowered their price targets to $18 and $19 respectively, reflecting mixed sector outlooks and macroeconomic headwinds.
