Company Overview
Dave & Buster's Entertainment, Inc. owns and operates a network of entertainment and dining venues across North America, providing adults and families with a unique combination of food service and interactive attractions. The company functions within the Communication Services sector, specifically classified under the Entertainment industry, positioning it as a hybrid business that blends hospitality revenue streams with leisure activities. With a market capitalization of $419.98M and an annual revenue of $2.11B, the entity represents a significant player in the regional leisure market, supported by a workforce of 23,420 employees. The combination of a $2.11B revenue base and a substantial employee count indicates a large-scale operation capable of generating broad market presence, while the $419.98M market cap reflects the current market's valuation of this specific segment within the broader entertainment landscape.
Financial Health
The company reported a revenue of $2.11B for the trailing twelve months, yet recorded a net income of only $300,000 alongside an EBITDA of $417.00M. The substantial gap between the $417.00M EBITDA and the $300,000 net income reveals a significant cost structure dominated by interest expenses or other non-operating charges that heavily impact the bottom line. Free cash flow stands at -$242,650,000, indicating that the company is currently burning cash rather than generating liquidity, which limits its immediate financial flexibility for internal expansion or debt repayment without external financing. Analyzing the three key margins, the gross margin is 40.2%, which suggests efficient product costing, while the operating margin of -3.4% and profit margin of 0.0% demonstrate that operating expenses are consuming the majority of gross profits. The balance sheet is highly leveraged, evidenced by a debt load of $3.59B compared to cash holdings of $13.60M and a debt-to-equity ratio of 2741.97. This extreme leverage level suggests the company relies heavily on borrowed capital and is vulnerable to interest rate fluctuations. Furthermore, the current ratio of 0.32 indicates severe short-term liquidity constraints, meaning current assets are insufficient to cover current liabilities without asset sales or refinancing. Finally, the return on equity is 0.2% and the return on assets is 2.5%, metrics that reveal management is currently struggling to generate meaningful returns on the capital deployed and the asset base utilized.
Valuation Assessment
The valuation metrics show a trailing P/E ratio of N/A and a forward P/E of 12.99, implying that the market is pricing the stock based on expected future earnings rather than current profitability due to the lack of trailing earnings. The price-to-book ratio is 3.21, which indicates that the market is currently valuing the company at a significant premium over its net book value, potentially reflecting expectations of future growth or intangible asset value. Alternative valuation measures include a price-to-sales ratio of 0.20 and an EV/EBITDA of 9.57; the low price-to-sales figure suggests the stock is trading at a discount relative to its sales volume, while the EV/EBITDA of 9.57 provides a multiple-based perspective that factors in the company's debt load. The 52-week high is $35.53 and the 52-week low is $11.33; without a specific current price provided in the data, the relative standing within this range cannot be calculated, but the spread indicates high historical volatility. The beta value is 1.75, which means the stock is expected to be 75% more volatile than the broader market, exposing investors to higher price swings during periods of market turbulence.
Growth & Income
Revenue growth year-over-year stands at -1.1%, while earnings growth is listed as N/A, indicating that the company is currently contracting in terms of top-line sales and lacks a positive earnings growth trajectory. The earnings growth figure of N/A suggests that earnings are not growing faster than revenue, as there is effectively no earnings growth to compare against the declining revenue. As the dividend yield is N/A and the payout ratio is 0.0%, the company does not distribute dividends to shareholders, which implies that any generated earnings are retained within the business rather than paid out. Consequently, the company reinvests its earnings into growth initiatives, though the current negative free cash flow suggests these reinvestments are not yet yielding positive cash returns. Overall, the growth and income profile is characterized by revenue contraction, zero dividend distribution, and a reliance on future earnings recovery to support the highly leveraged capital structure.