Is Denny’s Corporation (DENN) A Risky Investment?

Denny’s Corporation (NASDAQ:DENN) finished Friday with an addition of $0.43 to close at $15.83, an upside of 2.79 percent. An average of 652,560 shares of common stock have been traded in the last five days. There was a gain of $0.63 in the past week, and it reached a new high 26 times over the past 12 months. The last 20 days have seen an average of 557,780 shares traded, while the 50-day average volume stands at 542,432.

DENN stock has decreased by -2.82% in the last month. The company shares reached their 1-month lowest point of $14.53 on 10/20/21. With the stock rallying to its 52-week high on 03/12/21, shares of the company touched a low of $8.53 and a high of $20.02 in 52 weeks. It has reached a new high 16 times so far this year and achieved 7.83% or $1.15 in price. In spite of this, the price is down -20.93% from the 52-week high.

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Insider Transactions

53 days have passed since Denny’s Corporation (DENN) last reported insider trading activity. WOLFINGER F MARK, who is President, most recently acquired $10,000 shares at $16.36 per share on Aug 31. In this transaction, the insider spent $163,618. President, WOLFINGER F MARK, disposed of 9,877 shares at a price of $16.39 on Aug 30. The insider now owns more than $161,926 worth of shares. Prior to that, Sr. VP, CAO & Corp. Controller Gilmore Jay C went on to Sale 3,300 shares at $19.81 each on Mar 15. An amount of $65,358 was transacted.

Valuation Metrics

Denny’s Corporation (DENN) has a trailing price-to-earnings (P/E) ratio of 33.19, which compares with the 20.90 for the broader industry and 32.04 for the sector. In the last five years, Denny’s Corporation’s PE ratio has ranged between 239.25 and 2.632. The stock’s beta is 1.76. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 3.03, and the price-to-cash flow ratio at 24.06.

The quick ratio of Denny’s Corporation for the three months ended June 29 was 0.50, and the current ratio was 0.60, indicating that the company is not able to meet its debt obligations. Denny’s Corporation’s EBITDA margin for the year ending June 29 is 8.54%, while its operating margin for the same period stands at 7.70%. Its gross profit as reported stood at $101.52 million compared to revenue of $288.61 million.

Earnings Surprise

For the three-month period that ended June 29, Denny’s Corporation had $2.07 million in cash and short-term investments compared to $180.0 million in total debt. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of -$0.83 million in the quarter, while revenues of $23.18 million were grew 1185.54%. The analyst consensus anticipated Denny’s Corporation’s latest quarter earnings to come in at $0.11 per share, but it turned out to be $0.18, a 63.60% surprise. For the quarter, EBITDA amounted to $22.53 million. Shareholders own equity worth $64.2 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Denny’s Corporation (DENN) price momentum. RSI 9-day as of the close on 22 October was 53.46%, suggesting the stock is Neutral, with historical volatility in this time frame at 44.68%.

As of today, DENN’s price is $15.24 +4.14% or $0.63 from its 5-day moving average. DENN is currently trading -4.06% lower than its 20-day SMA and -6.88% lower than its 100-day SMA. However, the stock’s current price level is -3.18% below the SMA50 and +8.42% above the SMA200.

The stochastic %K and %D were 30.23% and 17.98%, respectively, and the average true range (ATR) was 0.60. With the 14-day stochastic at 54.17% and the average true range at 0.58, the RSI (14) stands at 50.71%. The stock has reached -0.02 on the 9-day MACD Oscillator while the 14-day reading was at -0.33.

Analyst Ratings

Truist upgraded Denny’s Corporation (NASDAQ: DENN) to a a Buy rating in its most recent analyst report. Previously, the stock was rated as a Hold. The consensus rating for Denny’s Corporation (DENN) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell DENN, while 4 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 1 analysts, while 5 others rate it as a “buy”.

What is DENN’s price target for the next 12 months?

Analysts predict a range of price targets between $17.00 and $22.00, with a median target of $18.50. Taking a look at these predictions, the average price target given by analysts for Denny’s Corporation (DENN) stock is $19.25.


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