Denny’s Corporation (NASDAQ:DENN) stock has touched a 52-week low, dipping to $3.79, as the company faces a challenging market environment. With a market capitalization of $197 million and a P/E ratio of 9.3x, InvestingPro analysis suggests the stock is currently undervalued. Over the past year, the diner-style restaurant chain has seen its stock value plummet, with a significant 1-year change showing a decrease of -57.62%. This downturn reflects investor concerns over the company’s performance and broader industry pressures that have weighed heavily on the food service sector. According to InvestingPro data, the stock’s technical indicators suggest oversold conditions, while analyst price targets range from $6.00 to $8.50, indicating potential recovery opportunities. Get access to 10+ additional exclusive ProTips and comprehensive analysis with InvestingPro. The 52-week low marks a critical point for Denny’s as it navigates through economic headwinds and strives to revitalize its growth trajectory. Despite current challenges, management has been actively buying back shares, demonstrating confidence in the company’s future prospects.
In other recent news, Denny’s Corporation reported its fourth-quarter financial results, revealing adjusted earnings per share of $0.14, which was slightly below the consensus estimate of $0.15. The company recorded quarterly revenues of $114.7 million, missing the anticipated $116 million. This shortfall was partly attributed to the accelerated closure of franchisee-operated restaurants, a strategic move to eliminate 150 underperforming units by the end of 2025. Despite these results, Benchmark analysts maintained a Buy rating on Denny’s stock, although they lowered the price target from $10 to $8 due to the company’s challenging start to the year and conservative fiscal guidance for 2025.
Additionally, Denny’s announced a pre-arranged stock trading plan to repurchase shares as part of its ongoing stock repurchase authorization. The plan, set to commence in 2025, aims to enhance shareholder value, although specific details on the number of shares or financial terms were not disclosed. In governance news, Brenda Lauderback, Chair of the Board of Directors, will retire in May 2025, prompting the company to begin the search for her successor. Denny’s is also focusing on expanding its Keke’s brand while projecting cautious outlooks for 2025, including anticipated inflationary pressures on commodities and labor.
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