Dave & Buster's (NASDAQ: PLAY) FQ1 results and outlook for the year affirm that its CEO change and Back-to-Basics strategy were the right move. The critical detail is that this heavily shorted market is amid a short-covering rally and rebound that will result in a complete price reversal and new uptrend.
The reason is that internal metrics show sequential improvements throughout the Q1 period, and the optimistic guidance forecasts improvements to continue, including improving free cash flow. Free cash flow is a critical factor for this retail stock as it allows the company to invest in its growth while aggressively repurchasing shares.
