DENN
Denny's Corporation
$6.25
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 52.3% below fair value
You pay
$6.25
Bear
$10.78
Fair
$13.09
Bull
$15.40
Bear
$10.78
+72.5%
$0.77 × 14x P/E
Fair
$13.09
+109.4%
$0.77 × 17x P/E
Bull
$15.40
+146.4%
$0.77 × 20x P/E
Adjust Assumptions
17.0x
0.77$
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
8.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (21 analysts)
$7.00
Divergence from AlphaVal
87%
Summary
Applying a 17x P/E to adjusted EPS of $0.77, the base-case value is $13.09 per share.
Warnings
The company's reported profits differ from official accounting profits by 88%. 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 87% 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