Why Dave & Buster's (PLAY) Stock Is Nosediving

What Happened:

Shares of arcade company Dave & Buster’s (NASDAQ:PLAY) fell 13.6% in the morning session after the company reported first-quarter earnings results that were bad across the board. Dave & Buster’s missed across nearly every metric we track, including revenue, EPS, adjusted EBITDA, and free cash flow. Management called out "a complex macroeconomic environment and consumer demand curve." Overall, this was a mediocre quarter for Dave & Buster's.

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What is the market telling us:

Dave & Buster's's shares are somewhat volatile and over the last year have had 12 moves greater than 5%. But moves this big are very rare even for Dave & Buster's and that is indicating to us that this news had a significant impact on the market's perception of the business.

Dave & Buster's is down 17.4% since the beginning of the year, and at $44.60 per share it is trading 34.7% below its 52-week high of $68.29 from April 2024. Investors who bought $1,000 worth of Dave & Buster's's shares 5 years ago would now be looking at an investment worth $1,118.

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