Earnings Preview: What To Expect From Dave & Busters On Tuesday

Dave & Buster’s Entertainment, Inc. is scheduled to report earnings before Tuesday’s open. The stock hit a record high of $73.48/share in 2017 and is currently trading near $36/share. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:

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Earnings Preview:

The company is expected to report a gain of $1.16/share on $441.28 million in revenue. Meanwhile, the so-called Whisper number is a gain of $1.22/share. The Whisper number is the Street’s unofficial view on earnings.

A Closer Look At The Fundamentals:

The company’s earnings and sales have been growing nicely over the past four quarters which bodes well for the current quarter. Elsewhere, the company is well positioned to benefit from the post pandemic return to a back to “normal” world. People have been stuck at home for almost two years and they want to get out and play. That bodes well for Dave & Buster’s because it is a nice, fun, relatively low cost, place to play. The stock is attractively valued as it sports a price to earnings (P/E) ratio of 16, which is lower than the S&P 500 (which is in the high teens).

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A Closer Look At The Technicals:

The stock has fallen around 30% below its 52-week high alongside the broader market and a slew of other stocks. As a result, there has been a decent amount of technical damage that needs to be repaired. For starters, the stock is trading below its 50 and 200 DMA lines which is not a healthy sign. The bulls want to see the stock gap up after earnings are released and then continue to rally while the bears want to see it gap down and continue to fall.

Pay Attention To How The Stock Reacts To The News:

From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.

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