If Dave & Buster's Entertainment (PLAY 4.18%) investors are feeling a little nervous this week, it's hard to blame them. The company behind the chain of high-volume restaurants reports fresh financials after Tuesday's market close, and Wall Street is bracing for uninspiring results.

Analysts see revenue climbing 13% to $305.5 million. A restaurant coming through with double-digit revenue growth would normally seem impressive, but Dave & Buster's growth is coming from expansion lately. The chain's fiscal fourth-quarter results will likely clinch this as the third fiscal year in a row of decelerating top-line growth. 

The news only gets worse on the bottom line, where analysts see Dave & Buster's earning $0.60 a share, just shy of the $0.63 a share profit it managed a year earlier. It's not really a surprise to see the stock hit a new 52-week low last week, and Wall Street pros that have chimed in lately aren't feeling very optimistic. 

The Million Dollar Arcade at Dave & Buster's with the redemption area in the background.

Image source: Dave & Buster's.

Playing to win even when you're losing

Dave & Buster's used to be a market darling. When many traditional eateries were starting to stumble two years ago -- a time some have been calling a restaurant recession -- this big-box purveyor of food and fun was rolling with strong growth and healthy unit-level performance. It's a different story now. 

The chain rocked the market late last year when it posted negative comps in its fiscal third quarter, something that Dave & Buster's hadn't done in its return as a public company. Things only got worse a month later when it hosed down the guidance it had put out for the fiscal fourth quarter that it will be reporting on this week. Dave & Buster's warned that comps had declined 5.1% in the quarter-to-date, forcing it to lower the midpoint of its revenue growth guidance from 17.2% to 12.9%. Earnings would also naturally take a hit. 

Analysts have been souring on the chain's near-term fundamentals. Stephen Anderson at Maxim slashed his price target from $83 to $74 last week, pointing out that revenue volatility and the need to beef up marketing expenses to boost sales after what will be back-to-back quarters of negative comps will sting results. He also lowered his profit forecast for the quarter. He's still sticking to his buy rating, and his lower price target still implies 77% of upside from current levels. However, it's still a bad sign when analysts pare back their expectations just days ahead of a critical financial report. 

Jake Bartlett at SunTrust also hosed down his price target on weak trends and cannibalization concerns last month. However, his revised price goal still represents 68% of upside off of last week's close. 

Tuesday afternoon's report doesn't have to be a disaster. Dave & Buster's has already braced investors for a rough performance, and the stock at new lows reflects that the bad news has already been discounted. The stock is also the cheapest that it has ever been, fetching just 16 times trailing earnings and less than 15 times what analysts see it earning in the year ahead.