Yahoo Finance Denny's Corporation Just Missed Earnings - But Analysts Have Updated Their Models
As you might know, Denny's Corporation (NASDAQ:DENN) last week released its latest quarterly, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$110m, statutory earnings missed forecasts by an incredible 36%, coming in at just US$0.09 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Denny's
Following the latest results, Denny's' eight analysts are now forecasting revenues of US$469.4m in 2024. This would be a credible 2.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 20% to US$0.56. In the lead-up to this report, the analysts had been modelling revenues of US$471.1m and earnings per share (EPS) of US$0.63 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.
The consensus price target held steady at US$11.07, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Denny's, with the most bullish analyst valuing it at US$15.00 and the most bearish at US$8.50 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Denny's' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.8% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 3.5% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 9.7% per year. Although Denny's' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$11.07, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Denny's. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Denny's analysts - going out to 2026, and you can see them free on our platform here.
Even so, be aware that Denny's is showing 5 warning signs in our investment analysis , and 1 of those is a bit concerning...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
