Denny's Corporation Stock Downgraded (DENN)
Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK (TheStreet) -- Denny's Corporation (Nasdaq:DENN) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its solid stock price performance. At the same time, however, we also find weaknesses including deteriorating net income, poor profit margins and feeble growth in the company's earnings per share.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
- Compared to its closing price of one year ago, DENN's share price has jumped by 31.42%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- DENN, with its decline in revenue, slightly underperformed the industry average of 2.9%. Since the same quarter one year prior, revenues fell by 10.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- DENNYS CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, DENNYS CORP reported lower earnings of $0.24 versus $1.14 in the prior year. This year, the market expects an improvement in earnings ($0.33 versus $0.24).
- The gross profit margin for DENNYS CORP is currently lower than what is desirable, coming in at 28.80%. Regardless of DENN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DENN's net profit margin of 5.58% is significantly lower than the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 93.0% when compared to the same quarter one year ago, falling from $92.05 million to $6.48 million.
-- Written by a member of TheStreet Ratings Staff
It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV