Shares of game and restaurant company Dave & Buster's (NASDAQ:PLAY) jumped as much as 11% in trading Monday, recovering losses from late last week. At 2:00 p.m. EDT, shares were still up 9.2% on the day after rising for most of the morning.
The drop in shares on Friday was due to fiscal second-quarter earnings being announced that were hardly impressive. Revenue fell 85% versus a year ago, and net loss was $58.6 million, or $1.24 per share. That's bad but should have been expected given the mall and restaurant slowdowns across the country because of COVID-19.
So, why are shares up today? The answer may lie in COVID-19 vaccines that are under development and testing. AstraZeneca's vaccine resumed trials over the weekend after a brief pause, and Pfizer's CEO Albert Bourla said that his company would know by the end of October if its vaccine works. And both could be distributed in the U.S. by the end of the year.
Companies like Dave & Buster's are in survival mode, and it's not really relevant whether revenue was down 80% or 85% last quarter; the company can't survive without the country moving past COVID-19. Any bit of data that shows the economy may be coming back is welcome news, and we're getting at least a little of that today. With $224.3 million in cash on the balance sheet, Dave & Buster's can last a few more quarters of depressed demand. If it can make it through the pandemic, this could be a quickly recovering growth stock once again.