Dave & Buster's Entertainment, Inc. (PLAY) shares rose about 10% during Friday's session despite a bearish first quarter financial report after Thursday's close. Revenue fell 56% to $159.8 million, missing consensus estimates by about $8 million, while GAAP net losses hit $1.37 per share, which was 54 cents worse the expected. EBITDA fell 129.3% year over year to a loss of $26.1 million driven by the ongoing closure of locations due to the COVID-19 outbreak.

The company's cash position stands at $157 million after drawing down its credit facility and raising $75 million in an at-the-market offering. As of a week ago, the company reopened 28 stores and plans to have 48 stores open in 15 states under reduced hours of operation and limited capacity this week.

Analysts have been cautiously optimistic on the stock despite the first quarter earnings miss. SunTrust analyst Jake Bartlett upgraded the stock to Buy with a price target of $22 per share, citing reopening plans, steadily improving sales at reopened stores, and a new flexible operating model capable of driving incremental profits at low volumes with potential long-term savings.

Meanwhile, BMO Capital analyst Andrew Strelzik raised his price target from $13 to $15 per share and reiterated a Market Perform rating. While near-term comp expectations remain "overly optimistic," the analyst believes that early comp progression is benefiting from competition dynamics.

Chart showing the share price performance of Dave & Buster's Entertainment, Inc. (PLAY)

From a technical standpoint, the stock rebounded from reaction lows toward highs of around $23.00. The relative strength index (RSI) remains neutral with a reading of 54.45, but the moving average convergence divergence (MACD) remains on the cusp of a bearish crossover. These indicators suggest a lot of uncertainty surrounding the stock's next move.

Traders should watch for shares to retest reaction highs near $23.00 over the coming sessions. If the stock breaks out, traders could see a move toward the 200-day moving average at $31.34. If the stock moves lower, traders should look for support near the 50-day moving average at $12.96 or trendline support near $10.00 per share.

The author holds no position in the stock(s) mentioned except through passively managed index funds.