Is It Time to Buy Dave & Buster's Stock?

Restaurant, sports bar, and arcade chain Dave & Buster's Entertainment (NASDAQ: PLAY) is having another forgettable year. Though the company continues to expand, shares are down 30% over the past two years, underperforming both the broad market and restaurant industry by a fair margin. Ouch.

What was in the recent past just a menu problem has turned into something much bigger. The list of entertainment options keeps getting longer, and the arcade half of the business is finding it difficult to differentiate itself -- though it's still the better-performing segment. The stock appears cheap, but it's beginning to seem cheap for a reason.

To be completely fair, Dave & Buster's did grow its revenue 6% year over year to $299 million during the third quarter. However, that was due to store count increasing to 134 compared to just 118 in the prior-year period. Comparable sales (which combines foot traffic and average guest spending, or "comps" from here on out) at existing locations fell 4.1%.

Source Fool.com