DENN
Denny's Corporation
$6.25
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 63.1% below fair value
You pay
$6.25
Bear
$13.94
Fair
$16.92
Bull
$19.91
Bear
$13.94
+123.0%
$1.19 × 14x P/E
Fair
$16.92
+170.8%
$1.19 × 17x P/E
Bull
$19.91
+218.5%
$1.19 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
5.3x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $7.00 from 21 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $16.92 per share.
Warnings
The company's reported profits differ from official accounting profits by 190%. Check what costs are being left out of the adjusted number.
Wall Street's average price target is $7.00 (from 21 analysts). Our estimate is 189% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples