Dave & Buster's Stock Pops After Jefferies Upgrade

CAKE sports attractively priced premiums at the moment

Deputy Editor
Sep 24, 2021 at 10:11 AM
facebook twitter linkedin


The shares of Dave & Buster's Entertainment Inc (NASDAQ:PLAY) are up 4.4% at $41.61 this morning, following a bull note from Jefferies. The firm upgraded the stock to "buy" from "hold" and raised its price target to $56 from $40, noting cost savings during the Covid-19 pandemic, and the driving of sales beyond 2019 levels thanks to its strong brand. In addition, the progress of vaccination efforts has helped ease concerns around full-service dining.

There's reason to believe that more upgrades could be on the horizon, as Jefferies joins a split brokerage bunch. Heading into today, five analysts called Dave & Buster's stock a "strong buy," while five called it a "hold" or worse. Meanwhile, the 12-month consensus price target of $50 is an 18.5% premium to current levels.

Short sellers have already been hitting the exits, though the stock still looks primed for a short squeeze. Short interest is down 12.4% in the most recent reporting period, yet the 6.17 million shares sold short make up 15.8% of the equity's available float, or nearly a week's worth of pent-up buying power.

Options traders, meanwhile, have been extremely bullish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Dave & Buster's stock sports a 10-day call/put volume ratio of 4.52, which sits higher than 90% of readings in its annual range. This means calls have been picked up at a quicker-than-usual rate in the last two weeks.

What's more, PLAY options can still be had for a bargain. This is per the security's Schaeffer's Volatility Index (SVI) of 52%, which stands higher than just 9% of readings from the past 12 months, indicating options traders are pricing in relatively low volatility expectations for Dave & Buster's stock at the moment. 

On the charts, the security is now pacing to log a close above the $40 level for the first time since July 1. And while the 80-day moving average thwarted an attempt to breach the $39 mark earlier this month, PLAY is now trading well above this trendline. Longer term, Dave & Buster's stock is up 164.6% year-over-year.

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 

300x250 - Banner 3 - v1