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NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share and increase in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.
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Highlights from the ratings report include:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- DENNYS CORP has improved earnings per share by 28.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, DENNYS CORP increased its bottom line by earning $0.27 versus $0.24 in the prior year. This year, the market expects an improvement in earnings ($0.36 versus $0.27).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.8%. Since the same quarter one year prior, revenues slightly dropped by 1.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for DENNYS CORP is currently lower than what is desirable, coming in at 29.96%. 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, the net profit margin of 7.21% trails the industry average.
- Net operating cash flow has declined marginally to $16.60 million or 2.15% when compared to the same quarter last year. Despite a decrease in cash flow of 2.15%, DENNYS CORP is still significantly exceeding the industry average of -81.77%.
Denny's Corporation, through its subsidiary, Denny's, Inc., owns and operates restaurants under the Denny's brand name in United States and internationally. Denny's has a market cap of $601.8 million and is part of the services sector and leisure industry. Shares are down 2.8% year to date as of the close of trading on Thursday.
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