Denny's (DENN) AI Stock Analysis

• Market Cap: $321.35M
• Dividend Yield: N/A
• Average Volume (3M): 1.65M
• Price to Earnings (P/E): 31.9
• Beta (1Y): 0.72
• 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: 1,433,671
• 30 Day Avg. Volume: 1,649,035
• 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: 2.16
• Enterprise Value/Revenue: 1.52
• Enterprise Value/Gross Profit: 3.61
• Enterprise Value/Ebitda: 11.75
• 1Y Price Target: $6.00
• Price Target Upside: -3.85% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 50 Neutral
• Price Target: $6.00 ▼(-3.85% Downside)

The score is held back primarily by weak financial quality (high leverage/negative equity and negative free cash flow). Offsetting factors include improving technical momentum and the pending take-private deal, while valuation remains only moderately attractive given the elevated P/E and no dividend yield provided.

Positive Factors

Strategic Acquisition

The acquisition by Sparkle Topco Corp. at a significant premium is a strategic move that could maximize shareholder value and support long-term growth plans.

Revenue Growth

Positive revenue growth reflects strong market demand and effective business strategies, enhancing long-term financial stability and market position.

Market Position

Denny's extensive network and international presence strengthen its market position, providing a competitive edge and opportunities for sustained growth.

Negative Factors

High Leverage

High leverage and negative equity indicate financial instability, which can limit strategic options and increase risk during economic downturns.

Declining Profit Margins

Declining profit margins suggest operational inefficiencies and cost pressures, potentially impacting long-term profitability and competitiveness.

Cash Flow Challenges

Negative free cash flow highlights cash generation issues, limiting the company's ability to invest in growth opportunities and manage debt effectively.

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 through its extensive network of franchised and company-owned restaurants. The primary revenue streams include food and beverage sales, which are supplemented by the sale of merchandise and promotional items. The company earns a significant portion of its income from franchise fees and royalties paid by franchisees, which are typically based on a percentage of their sales. Additionally, Denny's has formed strategic partnerships with third-party delivery services, expanding its reach and convenience for customers, thereby increasing sales. Seasonal promotions and limited-time menu offerings also contribute to revenue growth by attracting new customers and encouraging repeat visits.

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	455.73M	452.33M	463.92M	456.43M	398.17M	288.61M
Gross Profit	192.34M	332.11M	153.87M	141.64M	142.10M	79.69M
EBITDA	59.11M	62.08M	62.39M	126.43M	132.01M	24.19M
Net Income	16.11M	21.57M	19.95M	74.71M	78.07M	-5.12M
Balance Sheet
Total Assets	491.15M	496.27M	464.82M	498.33M	435.53M	489.39M
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	619.84M
Stockholders Equity	-34.58M	-34.02M	-62.69M	-37.12M	-65.27M	-130.45M
Cash Flow
Free Cash Flow	-5.55M	918.00K	62.15M	27.61M	68.82M	-10.10M
Operating Cash Flow	29.46M	29.49M	72.13M	39.45M	76.17M	-3.14M
Investing Cash Flow	-33.86M	-26.67M	-7.56M	-86.60M	29.01M	4.65M
Financing Cash Flow	4.40M	-6.01M	-63.19M	20.04M	-78.45M	-994.00K

Denny's Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.24
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 6.24 is above the 20-day moving average (MA) of 6.21, above the 50-day MA of 5.98, and above the 200-day MA of 4.67, indicating a bullish trend. The MACD of 0.06 indicates Positive momentum. The RSI at 67.64 is Neutral, neither overbought nor oversold. The STOCH value of 90.48 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	74 Outperform	$321.12M	12.42	9.63%	―	2.09%	12.10%
RICK	62 Neutral	$209.90M	13.37	6.12%	1.21%	-5.34%	256.61%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DIN	58 Neutral	$519.83M	16.49	―	5.10%	6.47%	-62.84%
DENN	50 Neutral	$321.35M	31.87	―	―	0.93%	-41.47%
JACK	49 Neutral	$391.16M	―	―	9.34%	-6.75%	-118.94%
RRGB	41 Neutral	$73.47M	-1.28	―	―	-3.61%	2.06%

Denny's Corporate Events

Denny’s faces shareholder lawsuits over proposed TriArtisan buyout

On November 3, 2025, Denny’s Corporation agreed to be acquired by Sparkle Topco Corp., an entity controlled by funds managed by affiliates of TriArtisan Capital Advisors, in a merger that will make Denny’s a wholly owned subsidiary and result in the company ceasing to be publicly traded. Ahead of a January 13, 2026 special shareholder meeting to vote on the deal, Denny’s has become the target of two lawsuits filed on December 16 and 17, 2025 in New York state court, as well as multiple stockholder demand letters, alleging that its proxy materials for the merger omitted or misrepresented material information on financial projections, valuation analyses, potential insider conflicts, and the background of the transaction, and seeking to block the deal. While denying any wrongdoing and calling the claims meritless, the company has issued supplemental disclosures expanding detail on the chronology of takeover approaches, outreach to private equity bidders, Truist Securities’ valuation work and prior relationships, and Denny’s own financial projections and cash-flow estimates, in an effort to moot the disclosure-based claims, reduce litigation risk and costs, and provide additional information to shareholders as they consider the proposed $6.25-per-share cash transaction.

The most recent analyst rating on (DENN) stock is a Hold with a $6.50 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 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.