Dave & Buster's Entertainment (NASDAQ:PLAY) seemed as if it was going to be the next restaurant operator to be kicked to the curb by investors a few months ago, hitting fresh lows and disappointing the market with negative comps. In a fortunate turn for the bulls, the "eatertainment" giant apparently has a few more credits left on its playing card.

Dave & Buster's has been inching higher lately, up better than 40% since its springtime lows. A better-than-expected fiscal first-quarter report helped spark the market's renewed interest in the chain of big-box retail centers blending casual dining with high-tech video gaming. A strong recovery got even more encouraging on Friday after a pair of analysts put out bullish notes on the stock. 

Four customers enjoying the Million Dollar Arcade at Dave & Buster's.

Image source: Dave & Buster's.

Giving the market a spin at the wheel

Nicole Miller Regan at Piper Jaffray is boosting her price target on the stock from $56 to $64. She concedes that market expectations for the fiscal second quarter that came to a close earlier this month will be negative -- making this the fourth period in a row of declining same-restaurant sales -- but that the goals set by her peers are achievable for Dave & Buster's. Regan has also spoken to virtual reality experts who feel that Dave & Buster's has its pulse on high-tech gaming trends, and she sees the high-margin amusements end of the business bouncing back sooner rather than later. She is naturally sticking to her earlier overweight rating. 

Sharon Zackfia at William Blair is also feeling upbeat about the stock's near-term prospects. She sees comps during the fiscal second quarter improving materially from the 4.9% slide in the first quarter. Zackifa sees earnings landing above the $0.66 a share that Wall Street's expecting. She doesn't really have to go out on much of a limb there, as Dave & Buster's has routinely trounced analyst profit targets even during the past few quarters as comps turned negative. Zackifa is reiterating her outperform rating on the stock, pointing out that the year-over-year comps will start getting better later this quarter once we lap last summer's hurricane-related closures. 

The timing is encouraging with the two bullish analyst notes. Dave & Buster's won't be discussing its fiscal second-quarter results until early next month, and this is where Regan and Zackifa are truly going out on a limb if the chain falters in its report.  

There are a lot of things in play when it comes to Dave & Buster's. Stephen M. King officially retired as CEO when the quarter came to a close less than two weeks ago. CFO Brian Jenkins is now at the helm, and next month's earnings call will be huge as he tries to keep momentum going for his first quarter as CEO. He's unlikely to shake things up as an inside hire, but it's obviously going to be an important conference call for investors. 

Dave & Buster's was once hailed as a winner of the retail and restaurant apocalypse, but those bullish hopes were dashed as comps turned negative and Dave & Buster's kicked off the calendar year by hosing down its guidance. If Dave & Buster's can lean on its amusements to sidestep any sluggishness taking place in the casual dining industry, and if its high-volume locations keep wooing landlords hungry to offer concessions in attracting a magnetic tenant, this won't be the end of the stock's recovery. The big test for Dave & Buster's is now roughly three weeks away.

Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool recommends Dave & Buster's Entertainment. The Motley Fool has a disclosure policy.