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Just For You Dave & Buster's Stock: Is Now the Time to Make a PLAY?Written by Thomas Hughes. Published 9/17/2025. 
Key Points - Dave & Buster's turnaround gains traction with the hiring of new CEO Tarun Lal.
- The business is financially sound with the balance sheet bolstered by sale-leaseback transactions.
- Sell-side trends suggest the downtrend is coming to an end, and the 2025 buying opportunity will soon disappear.
Dave & Buster's (NASDAQ: PLAY) FQ2 earnings weren't a blowout, with tepid revenue growth and a notable contraction in earnings. Still, the report underscores the company's strengths and the sizable recovery potential, which has improved markedly. To lead the turnaround, Dave & Buster's appointed 25-year KFC veteran Tarun Lal as CEO. what I just learned about what's unfolding in the White House is truly stunning…
And you need to see it for yourself.
Once you see what's unfolding behind the scenes, you'll understand why I rushed this interview and opportunity to you today. Click here to watch this video Lal's experience spans every aspect of KFC's U.S. operations, providing a solid foundation for steering Dave & Buster's through its current turnaround. While this effort carries both risks and opportunities, a CEO aligned with the company's priorities can accelerate the recovery and drive shareholder value higher sooner. 
Weak Q2 Margins Point to Near-Term Pressure—but a Floor Is in Sight Dave & Buster's Q2 results showed significant margin compression, beginning at the gross level and deepening at the operating level. Rising input costs, new-store openings and the expenses tied to the ongoing turnaround effort—including reversing prior missteps—drove much of the decline. Importantly, many of these costs should fade over time, while others will generate payoffs in employee and customer satisfaction, ultimately boosting revenue and profits. On the bright side, Dave & Buster's resumed growth in Q2. Revenue dipped only 0.05%, about 100 basis points below MarketBeat's consensus, but this ended several consecutive quarters of contraction and sets the stage for acceleration in Q3. More crucially, the company's operations remained strong enough to sustain financial health while funding reinvestment and share repurchases. Buybacks slowed year-over-year but still accounted for nearly 3% of market capitalization in the quarter, cutting the share count by roughly 14% versus last year. Dave & Buster's balance sheet remains healthy. The company has been bolstering its cash position through a sale-leaseback program, enabling aggressive repurchases. At quarter-end, cash and total assets rose, only partially offset by higher debt and liabilities. The net result: a 14% increase in shareholder equity despite the large share-count reduction, with further gains likely as the year progresses. Looking ahead, more sale-leasebacks are expected, and store count is set to grow, providing additional leverage for the rebound. The 2025 target is 11 new locations—including international openings, a key driver of long-term growth. While overseas operations still represent a small share of the footprint, they should expand over time and support mid- to high-single-digit growth for the company. Sell-Side Pressure Nears Its End as Short Interest Falls Persistent sell-side pressure has weighed on PLAY shares over the past 18 months. However, with short interest declining rapidly, institutional ownership remaining strong above 90%, and analysts pointing to a bottom, the downtrend appears close to its conclusion. Following the earnings release, two analysts adjusted their price targets downward toward long-term lows but kept Hold ratings, in line with the broader consensus. No analyst currently rates the restaurant stock as a Sell. Price action isn't yet overtly bullish but does suggest a floor near the COVID-19 lows—around $17—a level unlikely to break without a significant setback in the business. Likely, PLAY will trade sideways within this established range until upcoming earnings reflect the impact of the turnaround and renewed growth initiatives.
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