Dave & Buster’s Entertainment (NASDAQ:PLAY) stock was surging on Monday as the company has been in a good position financially in recent quarters.
The company is one of the top stocks in its category at the moment and its has an expected annual growth rate of 12%, which suggests high potential for capital appreciation as the ability to grow earnings at a compound rate over time makes it a good investment for the time being.
Dave & Buster’s has an EBITDA margin of 22.76%, as well as a return on investment of 15.4%, suggesting that the company still has some work to do but it’s headed in the right direction. Cash flow is even more important than earnings and the company has a free cash flow per share of +92 cents.
In addition to this solid figure, the company has a free cash flow on a percent-of-sales basis of 3.18%, meaning it converted this figure of its revenues into cash flow, generating higher cash flow than its competitors.
Dave & Buster’s has a decent liquidity and leverage rate of 0.40 but these figures are not where the company would like to be. This figure marks the company’s ability to meet short-term obligations and longer-term debts
PLAY stock gained about 3.1% on Monday as the company continues to grow at a consistent rate.