Dave & Buster’s Enter (PLAY:NAS) Fundamental Valuation Report


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Dave & Buster’s Enter $41.56 (USD) Close Price as of 05/04/2018

Based on the analysis conducted in this report, Dave & Buster’s Enter, (PLAY:NAS) is found to be  Undervalued.

Company Dave & Buster’s Enter
Symbol:Exchange PLAY:NAS
Industry Consumer Cyclical:Restaurants
Close Price/Date $41.56 (USD) 05/04/2018
Weighted Average Valuation $58.56 (USD)
Summary PLAY:NAS is found to be  Undervalued by 40.9% using the 2 valuation models shown below.
Valuation Models Used Analyst Consensus: $57.50 (USD)
(in order of importance) Comparables: $60.15 (USD)
Valuation Methods Analysis This company is:
Cash Flow Basis: Undervalued on a Cash Flow Valuation basis
Comparable Company Basis: Undervalued on a Comparable Valuation basis
Asset Basis: Undervalued on an Asset Valuation basis

Valuation Details

Dave & Buster’s Enter Valuations

Summary chart

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for PLAY:NAS

Using a discounted cash flow model we generated an intrinsic value of $139.37 (USD) for PLAY:NAS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

PLAY:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $139.37 1% 5% 1% 5%
WACC (or Ke) 5.99 $176.41 $114.70
Terminal Growth Rate 1.00 $117.09 $172.82
Tax Rate 0.23 $147.61 $131.12
Cash Flow 345,645,658 $133.05 $145.68
Capital Expenditures 4,166,800 $139.44 $139.30
Long Term Debt 289,774,000 $139.72 $139.01

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $60.15 (USD) for PLAY:NAS. We also generated a valuation of $60.02 (USD) using other metrics and comparables.
The comparable companies were Bloomin Brands (BLMN:NAS), Cheesecake Factory (CAKE:NAS), Brinker International (EAT:NYS), Texas Roadhouse (TXRH:NAS) and Wendy’s (WEN:NAS)

Company PLAY:NAS End Date Value
Earnings/Share $2.84 (USD)
Book Value/Share $10.63 (USD)
Sales/Share $26.77 (USD)
Cash Flow/Share $6.22 (USD)
EBITDA/Share $6.28 (USD)
Price Based on Comps Adjustment Factor (%)
$62.90 (USD) 22.5
$57.79 (USD) -29.0
$41.88 (USD) -19.2
$68.99 (USD) 0.8
$69.46 (USD) 14.1
PLAY:NAS Ratios Used Average Values BLMN:NAS CAKE:NAS EAT:NYS TXRH:NAS WEN:NAS
14.63 PE Ratio 22.15 24.55 15.82 14.91 32.89 22.57
3.91 PB Ratio 19.01 59.74 3.87 0.00 5.15 7.29
1.55 PS Ratio 1.56 0.59 1.10 0.60 1.95 3.58
6.69 PCF Ratio 11.10 6.05 10.43 6.48 15.11 17.42
7.47 EV to EBITDA 12.44 9.84 9.69 7.95 15.08 19.62

Multiples

Using a multiples approach we generated a valuation of  $64.60 (USD) for PLAY:NAS

Company PLAY:NAS End Date Value
Earnings/Share $2.84 (USD)
Book Value/Share $10.63 (USD)
Sales/Share $26.77 (USD)
Cash Flow/Share $6.22 (USD)
EBITDA/Share $6.28 (USD)
Price Based on Comps Adjustment Factor
$82.23 (USD) 0
$54.19 (USD) 0
$51.37 (USD) 0
$61.85 (USD) 0
$73.34 (USD) 0
Ratios Ratio Average
PE Ratio 28.95
PB Ratio 5.10
PS Ratio 1.92
PCF Ratio 9.95
EV to EBITDA 11.68

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  PLAY:NAS for the last 4 years was  5.10

We ran the Adjusted Book Value for  PLAY:NAS and generated a book value of  $29.85 (USD)
By multiplying these we get an adjusted valuation of  $152.17 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for PLAY:NAS. The 2 analysts have a concensus valuation for PLAY:NAS for 2019 of $57.50 (USD).

PLAY:NAS Dave & Buster’s Enter

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
2 0 0 5.0000 Buy 2018-4-4

Current Price: not available

Analyst Consensus
USD Millions 2019
Mean EPS 2.66
# EPS Analysts 1
Mean Revenue 1,216.80
# Revenue Analysts 1
Mean Target Price 57.50
Mean Cash Flow
Mean EBITDA 281.30
Mean Net Income 113.00
Mean Debt Outstanding
Mean Tax Rate 30.00
Mean Growth Rate
Mean Capital Expenditure

Company Overview (PLAY:NAS USD)

Price 41.56
Range 39.79 – 41.82
52 week 40.09 – 72.89
Open 40.83
Vol / Avg. 2.24M/760105
Mkt cap 1.7B
P/E 14.63
Div/yield 0.00/0.00
EPS 2.84
Shares 40.93M
Beta 0.37
Summary chart

Detailed Company Description

Dave & Buster’s Entertainment Inc is an owner and operator of high-volume venues that combine dining and entertainment in North America for both adults and families.

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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