Why CEC Entertainment Shares Jumped

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Chuck E. Cheese's operator CEC Entertainment (UNKNOWN: CEC.DL  ) soared 15% today after its quarterly results and guidance topped Wall Street expectations.

So what: The stock has slumped over the past couple of years on falling sales, but a wide first-quarter beat -- adjusted EPS of $1.90 on revenue of $255.3 million versus the consensus of $1.81 and $247.8 million -- coupled with upbeat guidance, suggests that things are starting to turn. In fact, comparable store sales increased 1.6% over the year-ago period, giving investors plenty of good vibes over management's new pricing and marketing initiatives going forward.

Now what: CEC now sees full-year 2013 EPS of $2.80-$2.95, nicely ahead of the average analyst estimate of $2.69. "We are fully committed to our strategic plan, and to returning capital to our shareholders as evidenced by our recently announced quarterly cash dividend of $0.24 per share and an additional authorization to repurchase $100 million under our stock repurchase plan," President and CEO Michael Magusiak said. Given CEC's still-hefty debt load and red-hot stock price, however, the risk/reward trade-off doesn't seem too appetizing at this point.

Interested in more info CEC? Add it to your watchlist.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2407828, ~/Articles/ArticleHandler.aspx, 9/26/2016 10:14:00 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 58 minutes ago Sponsored by:
DOW 18,094.83 -166.62 -0.91%
S&P 500 2,146.10 -18.59 -0.86%
NASD 5,257.49 -48.26 -0.91%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
CEC.DL $0.00 Down +0.00 +0.00%
CEC Entertainment CAPS Rating: No stars