Dave & Buster’s Entertainment, Inc.

NasdaqGS:PLAY

PLAY is an owner and operator of over 200 entertainment and dining venues across North America. Despite facing tough comps from the post-pandemic surge, the new management has laid out a near-term plan to achieve $1bn in adj. EBITDA, a target currently met with what I describe as "conclusive disbelief." 

In short, this target is expected to be reached through a combination of six organic growth initiatives, domestic and international unit expansion, and cost saving measures. Each one shows clear signs of progress, with the only uncertainty being the timing of achieving the company’s targets, rather than their feasibility.

For example, the special events business was managed at the store level until it was centralized to a call center with devastating results under previous leadership. The new management team has since begun reinstating incentivized in-store sales managers, with bonuses linked to same-store sales. Within a few quarters, special events revenues have not only recovered but have surpassed pre-Covid levels.

For all signs of progress, among others, refer to the full write-up below. As always, this isn't a short-term earnings trade but rather a long-term investment thesis.  

Scroll down to download the full four-page investment write-up along with its accompanying model.