Dave & Buster’s missed Q2 revenue and adjusted EPS expectations, sending shares lower and prompting multiple analysts to cut price targets while maintaining their ratings.
- Texas Capital lowered its target to $16 from $23 while keeping a Buy rating; Gordon Haskett and Freedom Capital cut their targets to $9 from $13, both maintaining Hold ratings,
- CEO Darin Harper is pushing the “Back-to-Basics” strategy, with management highlighting improving sales trends, new games and attractions, cost savings and two additional remodels planned for the rest of FY2026.
- Entertainment-related sales declined to $332.6 million, while adjusted EBITDA fell to $98.9 million from $129.8 million a year ago.
Dave & Buster’s (PLAY) is facing a wave of price-target cuts after its second-quarter results fell short of expectations, with analysts lowering their targets while maintaining their existing ratings on the stock.
The moves came after Dave & Buster’s reported a weaker-than-expected fiscal second quarter, sending shares sharply lower in premarket trading.
According to reports from The Fly, Texas Capital cut its price target to $16 from $23 while maintaining a ‘Buy’ rating. Gordon Haskett lowered its target to $9 from $13 and kept a ‘Hold’ rating, while Freedom Capital also reduced its target to $9 from $13 and maintained a ‘Hold’ rating, UBS also cut its price target to $9 from $12 .
PLAY shares fell nearly 12% in premarket trading Tuesday at the time of writing.
Q2 Results Fall Short
The entertainment and dining company reported Q2 revenue of $544.1 million, down 2.4% year over year, missing the $556.83 million consensus estimate, according to Fiscal AI. On an adjusted basis, Dave & Buster’s posted a loss of $0.27 per share, compared with the $0.19 profit analysts had anticipated.
The earnings miss was broad, with the company reporting an adjusted net loss of $9.5 million, or $0.27 per share, versus adjusted net income of $14.2 million, or $0.40 per share, in the prior-year quarter.
Entertainment Sales Remain A Key Pressure Point
The biggest weakness came from Dave & Buster’s core entertainment business. Entertainment-related sales fell nearly 9% to $332.6 million.
Comparable-store sales declined 2.9%, although that was better than the roughly 3.4% decline analysts had expected. The company also reported adjusted earnings before interest, taxes, depreciation, and amortization(EBITDA) of $98.9 million, down from $129.8 million a year earlier, with the adjusted EBITDA margin falling to 18.2% from 23.3%.
The results highlight the challenge facing CEO Darin Harper, who took over last month. Harper acknowledged that the company has fallen behind on innovation and keeping its entertainment offerings relevant to customers.
Wall Street Cuts Price Targets
The disappointing quarter prompted several analysts to lower their price targets, although the firms maintained their existing ratings on PLAY.
According to reports from The Fly, Texas Capital, Gordon Haskett and Freedom Capital reduced its targets. The cuts are notable because none of the three firms changed their underlying ratings. Instead, analysts appear to be lowering their valuation expectations while remaining divided on the longer-term outlook.
UBS also lowered its price target to $9 from $12 while maintaining a ‘Neutral’ rating, Analyst Dennis Geiger said sales trends are showing early signs of improvement, but greater-than-expected margin and earnings pressure, elevated macro risks and limited visibility suggest the turnaround remains in its early stages.
| Analyst | Old PT | New PT |
| UBS | $12 | $9 |
| Texas Capital | $23 | $16 |
| Gordon Haskett | $13 | $9 |
| Freedom Capital | $13 | $9 |
According to data from MarketWatch, five of the 12 analysts covering Dave & Buster’s maintain a ‘Buy’ rating on the stock, while seven have a ‘Hold’ rating.
Management Bets On A Turnaround
CEO Darin Harper, who recently took over the top job, said the company’s “Back-to-Basics” strategy is gaining momentum.
Management said food-and-beverage sales continued to grow, while special-events sales also remained a source of strength. Harper acknowledged that the company has work to do on innovation and keeping its entertainment offerings relevant, noting that 10 new games and attractions introduced this year are performing well.
Harper said the company is also focused on margin management, cost savings and free cash flow as part of the turnaround effort. Management has identified $15 million in cost savings over the next 12 months, with additional opportunities under review.
The company plans to complete two additional domestic remodels during the remainder of fiscal 2026, bringing the full-year remodel count to eight.
Retail Take on PLAY stock
On Stocktwits, retail sentiment around PLAY jumped from ‘bullish’ to ‘extremely bullish’ over the past 24 hours, while message volume increased from ‘high’ to ‘extremely high’ levels.
PLAY stock has dropped nearly 48% year-to-date.
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