The Analysts

• BMO Capital Markets' Andrew Strelzik maintains an Outperform rating on Dave & Buster's with a price target lifted from $62 to $66.
• Wells Fargo's Jon Tower maintains at Outperform, price target lifted from $59 to $60.
• Raymond James' Brian Vaccaro maintains at Outperform with a $60 price target.

BMO: Top-Line Stabilization

Management said same-store sales remain positive through the seven weeks of the first quarter 2019 and a 1-percent run rate is a "reasonable baseline" to assume for the quarter, the analyst highlighted. This should be seen as another sign the company is stabilizing comps while management's revenue and EBITDA guidance is likely conservative.

Wells Fargo: 'Resilient' Cash Flows

Dave & Buster's' business continues to face operating risks but its underlying cash flows remain "resilient," Tower said. Specifically, the company was able to increase its share buyback authorization, maintain its dividend, and grow its total units by more than 12 percent in fiscal 2019.

The stock remains attractive at 15.9 times 2019 estimated P/E, 7.8 times 2019 estimated EBITDA and 5.3 percent free cash flow yield. These are all favorable compared to the growth peer set average of 40.1 times, 18.4 times, and 4.8 percent, respectively. As such, the stock remains one of the research firm's top picks.

Raymond James: 3 Concerns

Dave & Buster's report was "solid" and management's outlook was "good enough," Baccaro said. But there are three concerns investors may want to keep in mind:

1. Year-over-year comparisons will become more difficult throughout 2019;
2. The competitive landscape continues to grow; and
3. Management reduced the low-end of its 2019 EBITDA guidance from up a mid-to-high-single digit to 2-7 percent.

Price Action

Dave & Buster's traded higher by 5.3 percent at $53.14 Wednesday afternoon.

Related Links:

What To Do With Dave & Buster's Now?

Dave & Buster's Challenges Persist, But Jefferies Says Its Valuation Can't Be Ignored

Photo credit: Michael Rivera, Wikimedia Commons