Denny's (DENN) AI Stock Analysis

• Market Cap: $318.26M
• Dividend Yield: N/A
• Average Volume (3M): 1.77M
• Price to Earnings (P/E): 31.5
• Beta (1Y): 1.11
• Revenue Growth: 0.93%
• EPS Growth: -41.47%
• Country: US
• Employees: 3,800
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.08
• Shares Outstanding: 51,498,993
• 10 Day Avg. Volume: 3,893,853
• 30 Day Avg. Volume: 1,766,757
• PEG Ratio: 1.03
• Price to Book (P/B): -9.06
• Price to Sales (P/S): 0.68
• P/FCF Ratio: 335.70
• Enterprise Value/Market Cap: 2.18
• Enterprise Value/Revenue: 2.04
• Enterprise Value/Gross Profit: 4.47
• Enterprise Value/Ebitda: 17.49
• 1Y Price Target: $5.69
• Price Target Upside: -7.63% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): 0.42
• Revenue Forecast (FY): $475.60M

• Rating: 55 Neutral
• Price Target: $6.50 ▲(5.52% Upside)

Denny's overall stock score reflects significant financial challenges, including high leverage and cash flow issues, despite some positive strategic initiatives. Technical indicators and valuation provide moderate support, while earnings call insights highlight both opportunities and ongoing challenges.

Positive Factors

Revenue Growth

Denny's positive revenue growth suggests a recovery trend, indicating effective strategies in attracting customers and expanding market reach.

Off-Premise Sales

The growth in off-premise sales reflects successful digital investments and adaptation to consumer preferences, enhancing long-term revenue streams.

Loyalty Program Launch

The new loyalty program aims to increase customer retention and engagement, potentially boosting long-term sales and customer loyalty.

Negative Factors

High Leverage

High leverage and negative equity suggest financial instability, which could limit growth opportunities and increase risk during economic downturns.

Decline in Profit Margins

The decline in profit margins indicates pressure on operational efficiency, which could affect profitability and cash flow if not addressed.

Volatile Consumer Environment

A volatile consumer environment poses risks to revenue stability, as economic pressures may lead to reduced discretionary spending on dining out.

Denny's Business Overview & Revenue Model

Company Description

Denny's Corporation, through its subsidiary, Denny's, Inc., owns and operates full-service restaurant chains under the Denny's brand. As of December 29, 2021, it had 1,640 franchised, licensed, and company restaurants worldwide. The company was formerly known as Advantica Restaurant Group, Inc. and changed its name to Denny's Corporation in 2002. Denny's Corporation was founded in 1953 and is based in Spartanburg, South Carolina.

How the Company Makes Money

Denny's generates revenue primarily through its company-owned restaurants and franchise operations. The revenue model includes sales from food and beverages sold at its locations, which are complemented by a robust takeout and delivery service. Franchise fees and ongoing royalties from franchised locations also contribute significantly to Denny's earnings. Key revenue streams include in-store dining, takeout services, and catering options, with a focus on high-margin items on their menu. Additionally, strategic partnerships with delivery platforms expand their customer base and drive sales, particularly in urban areas where convenience is paramount.

Denny's Financial Statement Overview

Summary

Denny's financial performance is challenged by high leverage, negative equity, and declining profitability margins, despite positive revenue growth. Cash flow issues further highlight financial instability.

Income Statement

Denny's shows a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) gross profit margin is moderate at 42.2%, but there's a significant decline from the previous year's 73.4%. The net profit margin has also decreased to 3.5% from 4.8% in the prior year. Revenue growth is positive at 38.1% TTM, indicating a recovery trend. However, EBIT and EBITDA margins have slightly decreased, reflecting pressure on operational efficiency.

Balance Sheet

The balance sheet reveals high leverage with a negative stockholders' equity, resulting in an unfavorable debt-to-equity ratio of -12.07 TTM. Return on equity is negative, indicating losses relative to equity. The equity ratio is also negative, suggesting potential financial instability. Despite these challenges, total assets have remained relatively stable.

Cash Flow

Cash flow analysis highlights significant challenges. The TTM free cash flow is negative, with a substantial decline in free cash flow growth. The operating cash flow to net income ratio is below 1, indicating limited cash generation relative to net income. The free cash flow to net income ratio is low, reflecting constrained cash flow conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	341.05M	452.33M	463.92M	456.43M	398.17M	288.61M
Gross Profit	155.32M	332.11M	153.87M	141.64M	142.10M	79.69M
EBITDA	39.69M	62.08M	63.77M	126.43M	130.53M	23.16M
Net Income	9.31M	21.57M	19.95M	74.71M	78.07M	-5.12M
Balance Sheet
Total Assets	491.15M	496.27M	464.82M	498.33M	435.53M	430.95M
Cash, Cash Equivalents and Short-Term Investments	1.17M	2.80M	6.17M	5.27M	33.17M	6.16M
Total Debt	417.42M	408.20M	395.26M	411.45M	324.82M	379.76M
Total Liabilities	525.73M	530.30M	527.50M	535.45M	500.79M	561.39M
Stockholders Equity	-34.58M	-34.02M	-62.69M	-37.12M	-65.27M	-130.45M
Cash Flow
Free Cash Flow	-3.23M	918.00K	62.15M	27.61M	68.82M	-10.10M
Operating Cash Flow	20.92M	29.49M	72.13M	39.45M	76.17M	-3.14M
Investing Cash Flow	-24.80M	-26.67M	-7.56M	-86.60M	29.01M	4.65M
Financing Cash Flow	3.65M	-6.01M	-63.19M	20.04M	-78.45M	-994.00K

Denny's Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.16
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DENN, the sentiment is Positive. The current price of 6.16 is above the 20-day moving average (MA) of 4.93, above the 50-day MA of 5.00, and above the 200-day MA of 4.47, indicating a bullish trend. The MACD of 0.14 indicates Negative momentum. The RSI at 66.97 is Neutral, neither overbought nor oversold. The STOCH value of 99.14 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DENN.

Denny's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LOCO	72 Outperform	$318.72M	11.74	9.63%	―	2.09%	12.10%
RICK	62 Neutral	$206.98M	12.73	6.12%	1.17%	-5.34%	256.61%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DENN	55 Neutral	$318.26M	31.51	―	―	0.93%	-41.47%
DIN	54 Neutral	$378.33M	8.22	―	8.01%	6.47%	-62.84%
JACK	47 Neutral	$315.72M	―	―	10.27%	-6.66%	-71.87%
RRGB	40 Underperform	$83.46M	―	―	―	-3.09%	-30.16%

Denny's Corporate Events

Denny’s Delays Quarterly Report Amid Merger Plans

Denny’s Corporation has announced a delay in filing its Form 10-Q (Quarter Report) for the financial period ending September 24, 2025. The delay is primarily due to the company’s recent engagement in a Proposed Merger with Sparkle Topco Corp. and Sparkle Acquisition Corp., which has necessitated additional time for gathering and reviewing financial information. Denny’s anticipates filing the report within five calendar days following the original due date. The company has reported an increase in company restaurant sales and a decrease in franchise and license revenue, with notable changes in operating and net income compared to the previous year. Forward-looking statements have been included, highlighting potential risks and uncertainties. The notification was signed by Robert P. Verostek, Executive Vice President and Chief Financial Officer, indicating ongoing compliance efforts.

The most recent analyst rating on (DENN) stock is a Hold with a $6.00 price target. To see the full list of analyst forecasts on Denny’s stock, see the DENN Stock Forecast page.

Denny’s Announces Acquisition by Sparkle Topco Corp.

On November 3, 2025, Denny’s Corporation announced a definitive agreement to be acquired by Sparkle Topco Corp., controlled by TriArtisan Capital Advisors LLC, Treville Capital Group, and Yadav Enterprises, in a $620 million all-cash transaction. This acquisition, which values Denny’s at a 52.1% premium over its closing stock price, will result in Denny’s becoming a privately held company, ceasing its public trading. The transaction is expected to close in the first quarter of 2026, subject to customary conditions and stockholder approval, and is seen as a strategic move to maximize shareholder value and support Denny’s long-term growth plans.

The most recent analyst rating on (DENN) stock is a Hold with a $6.00 price target. To see the full list of analyst forecasts on Denny’s stock, see the DENN Stock Forecast page.

Denny’s Corporation Reports Q3 2025 Financial Results

Denny’s Corporation is one of America’s largest full-service restaurant chains, operating under the Denny’s and Keke’s brands. The company is known for its extensive menu offerings and operates primarily in the restaurant industry with a significant number of franchised locations.

Denny’s Amends Credit Agreement with Wells Fargo

On October 28, 2025, Denny’s Corporation amended its credit agreement with Wells Fargo Bank, extending the maturity date to January 29, 2027, and reducing the credit facility from $400 million to $325 million. The amendment also prohibits the company from paying dividends and making share repurchases, impacting its financial flexibility and potentially affecting shareholder returns.

The most recent analyst rating on (DENN) stock is a Hold with a $4.50 price target. To see the full list of analyst forecasts on Denny’s stock, see the DENN Stock Forecast page.

Denny’s Earnings Call: Mixed Sentiment and Strategic Focus

The recent earnings call for Denny’s Inc. painted a mixed picture, reflecting both positive strides and ongoing challenges. While there were notable improvements in system-wide sales and successful promotional strategies, these were counterbalanced by declines in same-restaurant sales and increased operating costs. The overall sentiment leaned towards neutral, as the positives and negatives seemed to balance each other out.

Denny’s Corporation Reports Q2 2025 Financial Results

Denny’s Corporation, a leading full-service restaurant chain, operates under the Denny’s and Keke’s brands, offering a diverse menu across its numerous franchised and company-operated locations.