Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) missed earnings with its latest third-quarter results, disappointing overly-optimistic forecasters. It was a pretty negative result overall, with revenues of US$453m missing analyst predictions by 2.3%. Worse, the business reported a statutory loss of US$0.84 per share, much larger than the analysts had forecast prior to the result. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Taking into account the latest results, the consensus forecast from Dave & Buster's Entertainment's ten analysts is for revenues of US$2.25b in 2026. This reflects a reasonable 2.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 38% to US$3.06. In the lead-up to this report, the analysts had been modelling revenues of US$2.31b and earnings per share (EPS) of US$3.47 in 2026. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The consensus price target fell 18% to US$39.71, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Dave & Buster's Entertainment, with the most bullish analyst valuing it at US$48.00 and the most bearish at US$33.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Dave & Buster's Entertainment's revenue growth is expected to slow, with the forecast 2.0% annualised growth rate until the end of 2026 being well below the historical 22% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.9% per year. Factoring in the forecast slowdown in growth, it seems obvious that Dave & Buster's Entertainment is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Dave & Buster's Entertainment's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Dave & Buster's Entertainment going out to 2027, and you can see them free on our platform here..

Plus, you should also learn about the 4 warning signs we've spotted with Dave & Buster's Entertainment (including 1 which is a bit unpleasant) .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.