Q2 STOCKS TO BUY

Denny's Stock Surges Higher Ahead of Earnings

DENN could still have more growth in store for investors

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Restaurant chain Denny's Corporation (NASDAQ:DENN) has 1,645 franchised, licensed, and companied restaurants across the U.S., Canada, Puerto Rico, and more. The equity closed Monday's session up 1.6% at $16.16.

Denny’s announced on Oct. 12 that the company's senior leadership team will release its third-quarter earnings after the close today. DENN's senior management team will also hold a conference call as well, to answer questions regarding leadership's outlook. Wall Street analysts expect that Denny's earnings will come in at $0.16 per share.

Denny’s stock has increased 80% in price year-over-year and DENN has added 86% since bottoming at a 52-week low of $8.54 around this time last year. Additionally, shares of DENN have grown 10% year-to-date, but have shed 19% from its March 52-week high of $20.02.

From a fundamental point of view, Denny’s stock does not offer the best valuation or the most consistent growth at the moment. Denny's stock currently trades at a high price-earnings ratio of 33.88. However, DENN continues to offer potential for investors as recovery play. Finally, DENN has a forward price-earnings ratio of 20.92, indicating a big expected increase in earnings performance.

Short interest has popped 13.6% during the past two reporting periods and accounts for 6.2% of the stock's total available float. At DENN's average pace of daily trading, it would take short sellers just under seven days to buy back.

 
 

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