Dine Brands Global (DIN) AI Stock Analysis

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Dine Brands Global

(NYSE:DIN)

56Neutral

Dine Brands Global's overall score of 56 reflects significant financial and operational challenges. High leverage and declining sales are critical concerns, while robust cash flows and valuation offer some positives. Market sentiment is currently bearish, as indicated by technical analysis. Strategic initiatives to boost sales and reduce debt will be essential for improving the outlook.

Positive Factors

Competitive Position

IHOP is in a stronger competitive position than Applebee's, with successful promotions and a growing loyalty program.

Free Cash Flow

DIN's strong free cash flow yield suggests potential long-term upside in the shares.

Revenue Performance

Reported revenues of $205M beat consensus of $199M, with an $8M contribution from the 47 Applebee’s franchisee locations acquired in November.

Negative Factors

Analyst Downgrade

Analyst downgrades the rating to HOLD from BUY due to shaken confidence in near-term sales catalysts.

Earnings Performance

Applebee’s SSS fell (4.7)% and IHOP SSS fell (2.8)%, with AEPS of $0.87 below consensus of $1.34 and AEBITDA of $50M missed a $58M expectation.

Sales Catalysts

There is less confidence in positive sales catalysts for Applebee's upcoming quarters due to underwhelming performance.

Dine Brands Global (DIN) vs. S&P 500 (SPY)

Market Cap

$321.70M

Dividend Yield9.67%

Average Volume (3M)760.57K

Price to Earnings (P/E)5.0

Beta (1Y)0.67

Revenue Growth-2.26%

EPS Growth-32.36%

CountryUS

Employees992

SectorConsumer Cyclical

Sector Strength60

IndustryRestaurants

Share Statistics

EPS (TTM)4.21

Shares Outstanding15,636,426

10 Day Avg. Volume784,988

30 Day Avg. Volume760,566

Financial Highlights & Ratios

PEG Ratio0.16

Price to Book (P/B)N/A

Price to Sales (P/S)0.46

Price to Cash Flow (P/CF)3.10

P/FCF Ratio2.20

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$28.17

Price Target Upside50.08% Upside

Rating ConsensusHold

Number of Analyst Covering8

Dine Brands Global Business Overview & Revenue Model

Company DescriptionDine Brands Global, Inc., together with its subsidiaries, owns, franchises, operates, and rents full-service restaurants in the United States and internationally. It operates through five segments: Applebee's Franchise Operations, International House of Pancakes (IHOP) Franchise Operations, Rental Operations, Financing Operations, and Company-Operated Restaurant Operations. The company owns and franchises two restaurant concepts, including Applebee's Neighborhood Grill + Bar in the bar and grill segment of the casual dining category; and IHOP in the family dining category of the restaurant industry. Its Applebee's restaurants offer American fare with drinks and drafts; and IHOP restaurants provide full table services, and food and beverage offerings. As of December 31, 2021, the company had 1,611 Applebee's franchised restaurants, and 1,751 IHOP franchised and area licensed restaurants. It is also involved in the lease or sublease of 598 IHOP franchised restaurants and two Applebee's franchised restaurants; and the financing of franchise fees and equipment leases. the company was formerly known as DineEquity, Inc. and changed its name to Dine Brands Global, Inc. in February 2018. Dine Brands Global, Inc. was founded in 1958 and is headquartered in Glendale, California.

How the Company Makes MoneyDine Brands Global generates revenue primarily through its franchise operations, which include franchise fees, royalty fees, and licensing agreements associated with its Applebee's and IHOP brands. These fees are typically a percentage of the franchisee's sales. Additionally, the company earns money through company-operated restaurants, although the majority of its locations are franchised. Partnerships with food and beverage suppliers, as well as marketing and promotional activities, further contribute to its earnings. Dine Brands also benefits from its scale and brand recognition, which help maintain strong customer loyalty and drive sales across its restaurant network.

Dine Brands Global Financial Statement Overview

Summary

Dine Brands Global presents a mixed financial outlook. Robust cash flows and healthy margins are overshadowed by high leverage and negative equity, which poses significant financial risks. Enhancing revenue growth and equity is crucial for stability.

Income Statement

Neutral

Dine Brands Global exhibits a varied financial performance. The Gross Profit Margin remains solid, while the Net Profit Margin shows some stability over the years. However, revenue growth has experienced fluctuations, which presents a potential concern. EBIT and EBITDA margins are healthy, indicating effective cost control despite inconsistent revenue growth.

Balance Sheet

Negative

The Balance Sheet reveals significant leverage with a high Debt-to-Equity ratio due to negative equity, which poses a risk. The Return on Equity (ROE) is unmeasurable with negative equity, while the Equity Ratio is troublingly negative, underscoring financial instability. The company needs to focus on strengthening its equity base to improve financial health.

Cash Flow

Positive

Cash flow management is a notable strength for Dine Brands Global. Operating Cash Flow to Net Income Ratio is consistently positive, indicating effective cash generation. The Free Cash Flow to Net Income Ratio is also favorable, demonstrating robust cash flow relative to profits. Free Cash Flow growth has been substantial, enhancing liquidity and financial flexibility.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
812.31B	831.07M	909.40M	896.17M	689.27M
	Gross Profit
375.31B	396.68M	377.36M	375.23M	248.72M
	EBIT
178.61B	187.70M	176.05M	192.71M	93.02M
	EBITDA
178.61B	217.38M	214.31M	232.59M	1.16M
	Net Income Common Stockholders
64.89M	97.18M	81.11M	97.86M	-103.99M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
186.65B	146.03M	269.65M	361.41M	383.37M
	Total Assets
1.79T	1.74B	1.88B	2.00B	2.07B
	Total Debt
516.49B	1.59B	1.71B	1.77B	2.03B
	Net Debt
329.83B	1.44B	1.44B	1.41B	1.65B
	Total Liabilities
2.01T	1.99B	2.18B	2.24B	2.43B
	Stockholders Equity
-216.02B	-250.97M	-301.08M	-242.81M	-354.65M
Cash Flow		Free Cash Flow
94.09B	93.97M	54.02M	178.99M	85.58M
	Operating Cash Flow
108.16B	131.14M	89.34M	195.84M	96.50M
	Investing Cash Flow
-8.45B	-30.10M	-80.90M	3.86M	18.73M
	Financing Cash Flow
-51.70B	-225.44M	-108.80M	-230.40M	168.35M

Dine Brands Global Technical Analysis

Technical Analysis Sentiment

Negative

Last Price18.77

Price Trends

50DMA

25.39

Negative

100DMA

27.87

Negative

200DMA

29.35

Negative

Market Momentum

MACD

-0.59

Positive

RSI

42.76

Neutral

STOCH

17.40

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DIN, the sentiment is Negative. The current price of 18.77 is below the 20-day moving average (MA) of 23.63, below the 50-day MA of 25.39, and below the 200-day MA of 29.35, indicating a bearish trend. The MACD of -0.59 indicates Positive momentum. The RSI at 42.76 is Neutral, neither overbought nor oversold. The STOCH value of 17.40 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DIN.

Dine Brands Global Risk Analysis

Dine Brands Global disclosed 43 risk factors in its most recent earnings report. Dine Brands Global reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Dine Brands Global Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TXRH	78 Outperform	$10.29B	23.94	34.69%	1.62%	16.01%	42.54%
DRI	75 Outperform	$22.51B	21.71	48.22%	2.92%	5.00%	3.73%
EAT	71 Outperform	$6.07B	23.08	2390.91%	―	13.67%	69.41%
Sector *	59 Neutral	$10.97B	9.83	-1.56%	4.06%	1.31%	-16.49%
DIN	56 Neutral	$321.70M	5.00	-42.81%	9.67%	-2.26%	-32.36%
RRGB	41 Neutral	$57.12M	―	92.02%	―	-4.19%	-266.52%
BLMN	36 Underperform	$546.95M	―	-13.92%	13.51%	-7.42%	-153.35%

* Consumer Cyclical Sector Average

Performance Comparison

DIN

Dine Brands Global

18.77

-21.87

-53.81%

EAT

Brinker International

132.91

85.73

181.71%

DRI

Darden Restaurants

186.58

34.76

22.90%

RRGB

Red Robin Gourmet

3.04

-3.26

-51.75%

TXRH

Texas Roadhouse

153.22

5.95

4.04%

BLMN

Bloomin' Brands

6.26

-19.42

-75.62%

Dine Brands Global Earnings Call Summary

Earnings Call Date: Mar 5, 2025 | % Change Since: -18.36% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Neutral

The earnings call presented a balanced view with notable strengths in free cash flow and dual-brand success, but faced significant challenges with declining same-restaurant sales and adjusted EBITDA, alongside increased commodity costs and revenue declines.

Highlights

Adjusted Free Cash Flow Increase

Dine Brands Global, Inc. generated $106.4 million in adjusted free cash flow, up from $103.3 million last year, indicating financial stability.

Successful Dual-Brand Concept Launch

The first U.S. dual-brand location in Seguin, Texas, achieved sales almost three times its performance as a standalone IHOP.

IHOP Loyalty Program Growth

IHOP's loyalty program increased by over 30%, adding 2.4 million members, taking total membership to over 10 million.

Strong Franchisee Engagement

Franchisees showed strong commitment with oversubscription to the Applebee's renovation program and interest in dual-brand locations.

Lowlights

Decline in Same-Restaurant Sales

Applebee's same-restaurant sales were down 4.2% for 2024, and IHOP's were down 2%.

Decrease in Adjusted EBITDA

Adjusted EBITDA for 2024 decreased to $239.8 million from $256.4 million in 2023.

Revenue Decline

Total revenues decreased by 0.7% in Q4 and 2.3% for the full year.

Challenges in Consumer Spending

Macro headwinds significantly impacted consumer spending, particularly affecting guests with household incomes below $75,000.

Increase in Commodity Costs

IHOP's commodity costs increased by 4.7% in Q4, driven by factors like the avian influenza outbreak impacting egg pricing.

Company Guidance

During the Dine Brands Global, Inc. fourth-quarter and fiscal 2024 earnings conference call, the company provided several key metrics and guidance for 2025. The fiscal year 2024 ended with $106.4 million in adjusted free cash flow, an increase from $103.3 million in the previous year, highlighting the company's financial stability. However, adjusted EBITDA for the year fell to $239.8 million from $256.4 million in 2023. In Q4, adjusted EBITDA was $50.1 million compared to $62.2 million the previous year. The company's revenues decreased by 2.3% for the full year and 0.7% in Q4. Comp sales for IHOP declined by 2% for the full year and 2.8% in Q4, while Applebee's experienced a 4.2% decline for the year and 4.7% in Q4. Looking ahead to 2025, the company expects domestic system-wide comp sales for Applebee's to range between negative 2% and positive 1%, and for IHOP, between negative 1% and 2%. Dine Brands Global plans to remodel 30 Applebee's restaurants, convert five to a dual-brand concept, and maintain a G&A expense range of $200 million to $205 million. The company forecasts a 2025 adjusted EBITDA range of $235 million to $245 million, with CapEx spending between $20 million and $30 million.

Dine Brands Global Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Dine Brands Global Announces Leadership Transition at Applebee’s

Neutral

Feb 5, 2025

On February 5, 2025, Dine Brands Global announced the departure of Tony Moralejo as President of the Applebee’s Business Unit, effective March 4, 2025. John Peyton, CEO of Dine Brands, will serve as Interim President while the company searches for a successor. The transition aims to capitalize on growth opportunities, focusing on digital, menu innovation, and expansion. Moralejo will stay on as an advisor until June 4, 2025, ensuring a smooth transition.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.