By Christiana Sciaudone
Investing.com -- Dave and Buster's tumbled almost 20% after The Wall Street Journal reported on news from last week that the company may file for bankruptcy.
The company needs to reach a deal with lenders to survive the Covid-19 driven closures that have decimated business, according to the Journal, citing a securities filing from last week.
Second quarter comparable store sales dropped 87%, with total revenue coming in at $50.8 million compared to last year's $344.6 million, the company said in a statement last week.
The company, which operates combined entertainment and dining venues, is down 61% since the start of 2020, and has one buy rating, five holds and no sells.
Earlier today, Truist Securities analyst Jake Bartlett reiterated a buy rating and $22.00 price target on Dave & Buster's, saying they view the stock's reaction to bankruptcy concerns as "unfounded," according to StreetInsider. Bartlett called the decline a "severe over-reaction" to the Journal article.
"We continue to assume that PLAY's lenders will again grant covenant relief, especially given visibility into recovering EBITDA at that time as the company emerges from COVID crisis," Bartlett wrote.