Is Dave & Buster's Entertainment, Inc. overvalued or undervalued?

As of 12 June 2025, the valuation grade for Dave & Buster's Entertainment, Inc. has moved from fair to expensive, indicating that the company is overvalued. The current P/E ratio stands at 15, while the industry average is significantly higher at approximately 27.45. Additionally, the EV to EBITDA ratio is 5.30, which is lower than the peer Cinemark Holdings, Inc. at 11.12, further supporting the overvaluation conclusion. The ROE for Dave & Buster's is notably high at 52.60%, but this does not compensate for the inflated valuation metrics.
In comparison with its peers, Dave & Buster's appears less attractive, especially when considering the high valuation of Madison Square Garden Sports Corp. at 320.70. The company's recent stock performance shows a decline of 22.76% over the past year, contrasting with the S&P 500's gain of 10.26%, which reinforces the notion that the stock is not performing well relative to the broader market. Overall, the combination of high valuation ratios and poor stock performance suggests that Dave & Buster's is overvalued at its current price of 31.66.