NEW YORK (TheStreet) -- Shares of Denny's Corp. (DENN) were getting a boost, up 4.73% to $11.07 in late morning trading Friday, after the restaurant company was added to the "Best Ideas" list at Wedbush earlier this morning.
The firm upgraded the family restaurant chain to "outperform" from "neutral" with a higher price target of $14 from its prior $11.
Wedbush analysts cited Denny's short-term and long-term drivers to same-store sales, along with the potential for an increase to Wall Street's earnings forecasts.
Spartanburg, S.C.-based Denny's is a franchisor and operator of franchised full-service restaurant chains.
As of Dec. 4, 2014, the company owned roughly 1,689 franchised, licensed and company restaurants gloablly, including 1,586 restaurants in the U.S.
Separately, TheStreet Ratings team rates DENNYS CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate DENNYS CORP (DENN) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 7.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Powered by its strong earnings growth of 42.85% and other important driving factors, this stock has surged by 61.22% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
- Net operating cash flow has decreased to $10.62 million or 20.31% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, DENNYS CORP has marginally lower results.
- The debt-to-equity ratio is very high at 39.32 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.23, which clearly demonstrates the inability to cover short-term cash needs.
- You can view the full analysis from the report here: DENN Ratings Report