Dave & Buster's reverses post-earnings decline, up 9.5% afterhours at $28.33
17:19 EDT Dave & Buster's reverses post-earnings decline, up 9.5% afterhours at $28.33
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Dave Skyrockets 540% in a Year: Should You Buy the Stock Now?
Dave Inc. DAVE stock has shown outstanding growth over the past year. The stock has skyrocketed 540.5%, outperforming the industry's 51.6% rally and the Zacks S&P 500 composite's 12.3% growth. DAVE's performance is significantly higher than that of its industry peers, Katapult Holdings KPLT and MediaAlpha MAX. KPLT and MAX have declined 43.8% and 33.5% over the past year, respectively. Image Source: Zacks Investment Research Dave has also outperformed Katapult Holdings, MediaAlpha, and the industry as a whole in the past six months. DAVE shares have soared 152.6%, outperforming the industry's 3.1% rise. Katapult Holdings and MediaAlpha have gained 38.5% and 3.2% in the past six months, respectively. Image Source: Zacks Investment Research Dave shares have performed exceptionally well over the past year and the past six months. Investors must be flattered by this performance and are planning to initiate a buy. We have analyzed the stock and answered whether buying is the option or if investors should stay away from it. DAVE's CashAI is its proprietary underwriting engine, which has been proven to boost the company's financial performance, as evidenced by the first-quarter 2025 results. During this quarter, non-GAAP variable profit surged 67% year over year, with variable margin growing 950 basis points (bps). The credit goes to CashAI and its ability to improve Dave's cost management strategy, improving its profit margin. CashAI improved customer engagement, with ExtraCash originations increasing 46% year over year to $1.5 billion. Dave managed to approve higher ExtraCash amounts due to CashAI's ability to underwrite profitably despite it being a seasonally soft quarter. Furthermore, it enhanced the company's credit performance, evidenced by a 33-basis-point year-over-year improvement in the 28-day delinquency rate. CashAI leveraged insights and performance data to reduce the percentage of provisions for credit losses to origination from the 0.94% reported in the year-ago quarter down to 0.69%. With an expansion in the training data set, we expect CashAI to identify good risk and maximize approval rates, retaining its competitive edge. The underwriting engine's ability to precisely manage delinquency and loss rates while improving profitability puts Dave further than the existing fintech players that use traditional methods that are slower and less agile. Return on equity (ROE), a measure of profitability, reflects how effectively a company uses its shareholders' investments to generate earnings. Dave's trailing 12-month ROE is 59.2% compared with the industry's average of 6.6%. Image Source: Zacks Investment Research DAVE's current ratio in the first quarter of 2025 was 8.59, significantly higher than the industry average of 1.84. The metric has improved from the previous quarter and the year-ago quarter by 6.7% and 15%, respectively. The current ratio exceeds 1, which signals a positive outlook for investors by indicating the company's capacity to pay off short-term obligations efficiently. Image Source: Zacks Investment Research The Zacks Consensus Estimate for the company's 2025 revenues is pegged at $474.4 billion, suggesting a 36.7% increase from the year-ago reported level. For 2026, the top line is anticipated to rise 24.2% year over year. The consensus estimate for 2025 earnings is $8.74 per share, implying 66.8% growth from the year-ago reported level. For 2026, the bottom line is anticipated to rise 32.3% year over year. Over the past 60 days, two EPS estimates for both 2025 and 2026 have been revised upward with no downward adjustments. In the same period, the Zacks Consensus Estimate for 2025 earnings has gained 31.4% and that for 2026 has soared 42.4%. These upward revisions highlight analysts' growing confidence in Dave's ability to improve its financial performance, fueled by its strong business model and robust growth potential. Image Source: Zacks Investment Research We understand Dave's CashAI, an AI-based underwriting engine, is improving its credit quality. In doing so, the company has enhanced its financial performance and finds itself competing with fintech giants. Banking on this technology, the company can easily dominate in a space where fintech players rely on traditional methods that are slower and less agile. Apart from this, DAVE's robust capital return and strong liquidity position raise the green flag for investors. In addition to that, the company is fundamentally strong and has upward EPS revisions, exuding growing confidence among analysts. Factors like these compel us to recommend a 'Buy' on DAVE stocks. Investors who are looking to dip their hands in the fintech space must add Dave to their portfolio now. 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an hour ago
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LYV, DKNG, SPOT: Bernstein Selects the Best Entertainment Stocks to Buy Right Now
1975 was a landmark year for film, with blockbusters like Jaws, One Flew Over the Cuckoo's Nest, and The Rocky Horror Picture Show dominating the box office, while cult favorites like Daisy Miller and Hard Times inspired generations of creatives. But as cultural critic Paul Skallas puts it, we now live in an age of 'stuck culture,' where bold, risk-taking storytelling has largely faded from the mainstream. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter That said, after closely studying today's entertainment landscape, Bernstein analyst Ian Moore believes the spirit of 1970s cinema – its powerful narratives and star-making energy – still exists 50 years later in 2025, though it thrives in more niche, less traditional spaces rather than at the heart of Hollywood. From an investing perspective, Moore points out where today's gems can be discovered in the Entertainment sector: 'We expect the experience economy to continue to run hot as live music & sports venues scramble to meet seemingly insatiable demand for ultra-luxury VIP packages. Online, we believe music DSPs will meet strong demand for higher-priced subscription tiers, while high-rolling live bettors continue to expand their presence within sports betting. Although catering to this smaller cohort could cause growth in casual fans to slow, we expect profitability growth to accelerate meaningfully for companies that lead in accumulating business from superfans.' With all that as backdrop, Moore highlights three entertainment stocks he believes are well-positioned to thrive in today's market: Live Nation (NYSE:LYV), DraftKings (NASDAQ:DKNG), and Spotify (NYSE:SPOT). Together, they span live events, online sports betting, and music streaming – all major outlets for today's experience-driven consumer spending. Let's give the Bernstein picks a closer look. Live Nation Entertainment First up is Bernstein's top pick, Live Nation Entertainment. This company is one of the largest names in the event production segment, with a market cap of $33 billion and annual revenues of $23 billion last year. Live Nation's core business is bringing performance artists to the world's stages. Among the acts that Live Nation has recently brought to the stage are such big names as Imagine Dragons, Disturbed, the Backstreet Boys, and Bruno Mars. The company operates through three main segments, Ticketmaster, Live Nation Concerts, and Live Nation Media & Sponsorship, with concerts being the prime revenue generator. The concert business is extensive. Live Nation produces more than 44,000 such events annually, along with more than 100 festivals, all across 45 nations around the world. The company's aggregate audience exceeds 120 million concertgoers and music fans every year. While concerts are the main business, Live Nation's Ticketmaster segment also sells admission to such events as venues, festivals, major sports leagues, and theater groups. In all, the company sells some 550 million tickets annually. Turning to the company's financial results, we see that Live Nation last reported earnings for 1Q25. The company brought in $3.38 billion at the top line. This was down 11% year-over-year, and missed the forecast by $140 million. At the bottom line, earnings came to a net loss for the period; the EPS was -$0.32. We should note that the Q1 EPS was 7 cents per share better than had been expected. Looking forward, the company reported a record in event-related deferred revenue, at $5.4 billion. This bodes well for future business, and was up 24% year-over-year. For Bernstein's Ian Moore, the outlook on Live Nation is highly positive, as he goes to great lengths to explain, writing, 'We are bullish on LYV due to its powerful flywheel which has the potential to drive meaningful outperformance across each of its operating segments. Technological improvements coupled with changes in artist and consumer behavior, especially among younger generations, enhance the inherent scarcity value of live experiences and position Ticketmaster to grow GTV ahead of expectations (our +11% vs. consensus' +HSD) into the summer concert season and beyond.' 'As LYV's Venue Nation expansion and VIP upgrade strategy complements a strengthening primary ticketing business, we are forecasting meaningful sponsorship growth (+mid-teens AOI vs. +LDD) on the upscaled inventory of opportunities for brands along with sizable uplift to concert margins (+50bps per year, generating +$50M in AOI vs. consensus) on a more favorable mix. We also believe that recent public and political pressure stems from a misunderstanding of the business and see the potential for multiple expansion as investor concerns ease,' Moore went on to add. Moore puts an Outperform (i.e., Buy) rating on this stock, along with a $185 price target that implies a one-year upside potential of 29%. (To watch Moore's track record, click here) The Strong Buy consensus rating on LYV shares is unanimous, based on 13 recent analyst reviews. The stock's $143.71 trading price and $166.15 average price target together suggest that the shares will gain 15.5% in the coming year. (See LYV stock forecast) DraftKings Next up is a leader in the field of sports betting, DraftKings. This company, founded in 2012, is a fast-growing player in the US betting market, offering a range of products that include sportsbook and fantasy league platforms. The company's betting products cover most of the world's major sports and leagues, American football, Major League baseball, the NBA, the NHL, international soccer, and the hugely popular – although non-pro – college hoops. DraftKings is also a major platform for fantasy leagues, which let fans and bettors put some skin in the game, by making pre-game choices on players and line-ups that will mix with the game results to determine how the bets work out. Sports betting is legal in about half the states of the Union, a fact that presents DraftKings with a patchwork quilt of regulatory regimes to navigate – which it manages successfully. DraftKings operates legal sports betting, along with legal casino games, across the country, in 26 states plus DC. Fans and bettors can find more than 1,000 ways to bet with DraftKings. The company at the end of last year completed its acquisition of SimpleBet, a move that firms up its ability to offer quality betting options and a smoother experience for its customers. On the financial side, DraftKings reported 1Q25 revenues of $1.41 billion, a figure that was up 19.5% year-over-year, although it missed the estimates by $20 million. The company's earnings in the quarter, at 12 cents per share in non-GAAP measures, were in-line with expectations. Looking ahead, DraftKings has set its full-year 2025 revenue guidance with a mid-point of $6.3 billion, slightly lower than the $6.37 billion consensus view. The company's top-line guidance midpoint suggests 32% annualized revenue growth. Checking in again with Ian Moore, we find the analyst predicting sound results for DraftKings going forward. Moore says of the stock, 'We believe DKNG presents a compelling and differentiated investment case within a dynamic OSB & iGaming landscape and is positioned for sustained profitability growth due to its distinct advantages in live betting. DKNG's enhanced live pricing capabilities, significantly boosted by the SimpleBet acquisition, are the core lever toward capturing substantial growth in US live betting and driving strong handle and profitability growth (ARPU +MSD vs. consensus). DKNG has also demonstrated a unique ability to capitalize on event-driven engagement, which we believe should drive accelerating live bettor acquisition as streamers begin to distribute an increasing volume of live events. We also see untapped potential around Jackpocket cross-sell to live betting and a key upcoming catalyst in its integration into the core platform. User profitability is key to our differentiated view on DKNG.' These comments support Moore's Outperform (i.e., Buy) rating on DKNG shares, and his $46 price target indicates a potential upside of 22.5% in the next 12 months. This is another stock with a unanimous Strong Buy consensus rating, based on 26 recent analyst reviews, all positive. The stock's $37.56 trading price and $54.43 average target price combine to imply a 45% gain on the one-year horizon. (See DKNG stock forecast) Spotify Technology Last on our list of Bernstein picks is Spotify, the popular music and audio streaming company. Spotify is based in Sweden, where it was founded in 2006, and was an early leader on the music streaming scene. The company has grown dramatically since its founding, as online streaming has grown ever more popular. Today, Spotify boasts a market cap of $139 billion, a figure that helps to quantify the sheer size and strength of Spotify's business. That business is extensive, as Spotify has moved beyond just streaming songs. The company does boast a line-up of more than one million creative musicians and artists available on its site, but it also features podcasts, including the highly popular Joe Rogan Experience. Fans and listeners can search Spotify's site to find exactly what they want to listen to, using categories such as popular artists, featured charts, or trending songs. Spotify uses AI technology to provide listeners with personalized playlists and recommendations. When we look at Spotify's financial results, we find that the company generated 4.2 billion euros in top-line revenue during 1Q25, the last period reported. This was congruent with analyst expectations, and was up 15% from 1Q24. The company's bottom line earnings came to 1.07 euros per share. These results were supported by solid growth in Spotify's user base. The company's subscribers increased in Q1 by 12% year-over-year to reach 268 million. The monthly active users, or MAU, were up 10% year-over-year, and came in at 678 million. One last time, we'll check in with Bernstein's Moore, who sees past success as indicative of future potential for this stock. Moore is also impressed by Spotify's ability to leverage its pricing power. He says of this streaming service, 'We continue to see a strong investment case for SPOT built on its proven ability to leverage its sizable market share and quality platform. We believe the business can exercise pricing power sustainably given recent success with minimal churn and expect regular price hikes to become a consistent ARPU driver (+MSD vs. consensus expectations). We anticipate further tailwinds to gross margins on the steadily growing availability of non-music content on the platform (+50bps per year vs. consensus). We also expect that the highly anticipated superfan subscription tier will move quickly toward an early 2026 launch once Sony gives the necessary approvals and will be met with rapid adoption among existing and potential new subscribers, which will be a strong catalyst to inflect gross profit growth toward the high-20s and gross margins toward 40%+ long-term. We believe our variant perception on SPOT is mostly around pricing.' Following from this stance, the Bernstein analyst gives Spotify an Outperform (i.e., Buy) rating, and he supports that with an $825 price target that suggests a one-year gain of 19% for the shares. This stock has a Moderate Buy consensus rating from the Street's analysts, based on 28 reviews that include 19 to Buy, 8 to Hold, and 1 to Sell. However, the stock is priced at $693.32 and its $676.44 average price target implies it will stay rangebound for the time being. (See SPOT stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment. Disclaimer & DisclosureReport an Issue Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 hours ago
- Yahoo
Quantum stocks higher as Nvidia CEO sees ‘inflection point'
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