by Ian Harvey
June 13, 2018
OUT WHILST THE GOING IS GOOD!
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
Dave & Buster's Entertainment Inc (NASDAQ: PLAY)
Here is an update of Dave & Buster's Entertainment Inc options trade. This options trade was given as a consideration to “Earnings Predictions Members” of Stock Options Made Easy on Monday, June 11, 2018; and after reporting, earnings have soared; providing a potential profit of 339% - and more profit could be expected!
PATIENCE PAYS OFF
YOU NEED TO BE IN TO PROFIT!
Dave & Buster's Entertainment Inc (NASDAQ: PLAY), an American restaurant and entertainment business headquartered in Dallas, will report earnings after the market closes.
The consensus EPS forecast for the quarter is $0.93, with revenues of $322.27 million. The Whisper number is for $0.97 per share. The reported EPS for the same quarter last year was $0.87. The revenue would mark a nearly 6% climb from the year-ago period when the company posted quarterly revenues of $304.15 million.
Dave & Buster's shares climbed over 2.3% through late afternoon trading on Friday. This is a sign that investors might be expecting strong first-quarter results from the restaurant and arcade chain, when it reports.
Its stock price climbed over 12% during the last four weeks, prior to Friday's surge; but is still down roughly 35% over the last year. The company closed at $47.56 per share on Thursday, down over 30% from its 52-week high of $71.50 per share.
However, shares of Dave & Buster's could continue their month-long charge if the company reports solid Q1 financial results.
Dave & Buster's still believes it has room to aggressively expand its own store footprint. It launched 14 new stores last year, compared to 11 in the prior year, and executives plan to open as many as 15 in 2018.
"Our primary growth vehicle and the biggest driver of value," CEO Steve King explained to investors in early April, "continue to be opening stores that offer excellent returns."
The company launched its first 17,000 square-foot location during the quarter, and management believes the new format, which is a dramatic reduction from its 30,000 to 45,000 square foot full-sized stores, could help the business in two key ways.
Option trade to consider: Buy the PLAY JULY 20 2018 50.000
CALL at approximately $1.55.
Dave & Buster's Entertainment stock was currently up over 16% to $ 55.52 per share in after-hours trading shortly after its earnings report was released; and yesterday saw Dave & Buster's hit as much as 16.7% in trading.
First-quarter revenue jumped 9.2% to $332.19 million on the back of six new store openings in the quarter. Net income was down slightly from a year ago to $42.2 million, or $1.04 per share. On the downside, comparable store sales fell 4.9% in the quarter, although the decline was offset by new store openings.
However, analysts were only expecting $321.6 million in revenue and earnings of $0.94 per share. It's the earnings beat that really surprised investors and that's why shares moved sharply higher yesterday.
Shares of Dave & Buster's sunk over 33% during the last year. However, the company's stock price is up 15% over the last four weeks. The company's stock also popped 0.44% on Monday to hit $47.83 per share prior to the release of its quarterly earnings results.
Dave & Buster's is
expanding quickly, expecting to open 14 to 15 new stores this year. But
management also expects same store sales to fall low-to-mid single digits in a
sign that the business is weakening in core markets. Management is trying to
increase interest in Dave & Busters by introducing Angus burgers and
launching a virtual reality platform, so the hope is that the strategy will get
stores growing again. If stores do begin growing we could see even bigger
long-term gains for the stock.
So, for “Earnings Predictions” members who managed to execute this trade recommended by Stock Options Made Easy; a potential profit of more than 339% made 24 hours -- Is it now time to exit the trade?
Entering the option trade at a cost of $1.55 or less; reaching as high as $6.80; one options contract would provide a profit of $525.00; or 339% Potential Profit.
ACTION TO TAKE…….
Now is the time to decide if it is worth continuing to hold this trade or exit on excellent profits. It is nearly always prudent to exit a trade before an unknown incident occurs that could rattle a sound profit, and this is a fine example of such a situation.
Our approach is to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been very exceptional.
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