Denny's (DENN, Financial) shares posted a notable rise of 5.59% after being recently upgraded to Buy from Neutral by a Citi analyst. The upgrade will be driven by factors such as accelerated store closures, improved cost discipline and clearer growth plans for KeKe's.

According to the latest data, Denny's (DENN, Financial) share price is $6.61. Despite the recent rise, the company's shares are still near their three-year low. This presents an attractive opportunity for investors who believe in the company's turnaround strategy. It's important to note that the stock has seen a significant decline overall, with a year-to-date decline of 40.9% and a five-year decline of 21.4%.

In terms of valuation, Denny's currently has a price-to-earnings (P/E) ratio of 20.03 and a price-to-sales (P/E) ratio near its three-year low of 0.79. The company's GF value is estimated at $12.47, indicating possible undervaluation. For more information about the GF value, see the GF value page. However, it is called a “Possible Value Trap,” which advises caution.

Financially, Denny's has some weaknesses, with a “poor” financial strength rating, a worrisome Altman Z-Score of 1.49, and a low interest coverage ratio of 2.3. These ratios imply a potential risk of financial distress and reduced ability to cover interest payments, primarily due to a high debt load. Despite these challenges, the company's operating margin is growing, which is typically a positive sign of improved profitability.

With a market cap of $339.58 million, Denny's is part of the cyclical consumer goods sector, particularly the restaurant industry. Investors should consider both the opportunities presented by recent strategic initiatives and ongoing financial challenges when evaluating the potential of Denny's (DENN, Financial) stock.