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Dave & Buster's Jumps as Analysts See Strong Sales Recovery

Dave & Buster's reported first-quarter results ahead of estimates. Wall Street likes the sales rebound for the entertainment-center operator.

Shares of Dave & Buster's (PLAY) - Get Report jumped Friday as analysts praised the entertainment-center chain's better-than-expected fiscal-first-quarter results and rapid sales recovery.

At last check Dave & Buster's shares rose 4% to $45.84. 

Analysts at Raymond James maintained an outperform rating and $55 price target. The investment firm says the sales recovery at the Dallas company "significantly exceeded" expectations and "much stronger profitability" ensued. 

Raymond James expects 2021 earnings before interest, taxes, depreciation and amortization to exceed 2019 levels. The investment firm previously had not expected that to happen until 2022.

Meanwhile, analysts at Truist maintained a hold rating while raising their price target to $53 a share from $46.

The first-quarter results and current trends show a "rapid sales recovery" and reflect the company's more efficient operating model.

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The stronger results came as Dave & Buster's saw amusement spending per person spike, and even as it had fewer promotions in the quarter. 

At the same time, the "[impact] of pent-up demand may be more temporary than for restaurants given low historical frequency of visits and our expectation that competitive intrusion will resume," analyst Jake Bartlett said. 

Gordon Haskett analyst Jeff Farmer maintained a hold rating and $47 price target, saying "PLAY's average weekly sales volume recovery continued at a healthy clip in May into early June -- suggesting the broader sector recovery still has some steam." 

Dave & Buster's reported fiscal-first-quarter revenue of $265.3 million, compared with $159.8 million in first-quarter 2020 and $363.6 million in Q1 2019.

The FactSet analyst consensus called for revenue of $246.3 million in the latest quarter.

Net income totaled $19.6 million, or 40 cents a share, in the latest quarter, compared with a net loss of $43.5 million, or $1.37 a share, in Q1 2020 and net income of $42.4 million, or $1.13 a share, in Q1 2019.