What Happened?
Shares of arcade company Dave & Buster’s (NASDAQ: PLAY) fell 3.7% in the afternoon session after the major indices continued to retreat (Nasdaq -1.5%, S&P 500 -1.2%) amid profit-taking and renewed concerns about tariffs.
The decline appears linked to wider market anxiety after a court decision ruled many of President Trump's tariffs illegal. While the tariffs are still in effect pending an appeal, the news has markets on edge, leading to a spike in volatility.
Adding to the negative sentiment are seasonal trends, as September is traditionally the worst-performing month on Wall Street. With no company-specific news, Dave & Buster's stock appears to have been caught in the overall market pessimism.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Dave & Buster's? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Dave & Buster’s shares are extremely volatile and have had 47 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 3.1% on the news that Truist Securities lowered its price target on the stock ahead of the company's upcoming earnings report. The analyst firm reduced its price target to $27.00 from $29.00 while maintaining a "Hold" rating. The adjustment stems from expectations that Dave & Buster's will miss its second-quarter 2025 sales and adjusted EBITDA estimates when it reports results, which is anticipated in early September. According to Truist's analysis, improvements in same-store sales seen early in the second quarter appeared to weaken towards the end of the period and into the third quarter. The firm also noted there are no clear near-term sales catalysts for the company. This follows a first quarter where the company also failed to meet analyst expectations for revenue and earnings, adding to investor concerns about its performance.
Dave & Buster's is down 18.3% since the beginning of the year, and at $24.76 per share, it is trading 41.1% below its 52-week high of $42.02 from November 2024. Investors who bought $1,000 worth of Dave & Buster’s shares 5 years ago would now be looking at an investment worth $1,312.
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