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On Thursday, Benchmark analyst Todd Brooks confirmed a Hold rating on Dine Brands Global Inc. (NYSE:DIN) shares, maintaining the firm’s stance on the stock following the company’s fourth-quarter performance that fell short of market expectations. According to InvestingPro data, the company currently trades at an attractive P/E ratio of 5.6x, suggesting potential undervaluation despite recent challenges. Dine Brands, the parent company of Applebee’s and IHOP, reported its operating results for the fourth quarter of 2024, which did not meet consensus projections in terms of gross profit, adjusted earnings per share (AEPS), and adjusted earnings before interest, taxes, depreciation, and amortization (AEBITDA).
The reported revenue for the quarter was $205 million, slightly ahead of the consensus estimate of $199 million, partly due to an $8 million contribution from 47 Applebee’s franchise locations acquired in November. The company’s trailing twelve-month revenue stands at $812.3 million, with an EBITDA of $206.9 million. However, same-store sales (SSS) at Applebee’s dropped by 4.7%, and IHOP’s SSS declined by 2.8%. The AEPS stood at $0.87, which was lower than the anticipated $1.34, and the AEBITDA of $50 million missed the expected $58 million.
Management has indicated stable same-store sales trends quarter-to-date and provided guidance for fiscal year 2025, expecting Applebee’s SSS to range between a decrease of 2% and an increase of 1%, and IHOP’s SSS to be between a decrease of 1% and an increase of 2%. The company’s leadership is focused on developing new strategies to offer value to customers that will stand out in the current competitive landscape.
Benchmark’s analyst has chosen to maintain the Hold rating on Dine Brands stock at this time, as the company navigates through the challenges of delivering consumer value across its brands.
In other recent news, Dine Brands Global reported its fourth-quarter 2024 earnings, revealing a notable miss on earnings per share (EPS) forecasts, with an EPS of $0.87 compared to the expected $1.35. However, revenue slightly exceeded predictions, coming in at $204.8 million against a forecast of $201.05 million. Despite the revenue beat, analysts at Truist Securities expressed concerns over the company’s performance, leading them to cut the price target from $37.00 to $27.00 while maintaining a Hold rating. The company’s adjusted EBITDA decreased year-over-year, but free cash flow increased, highlighting a mixed financial performance. Additionally, Dine Brands launched a successful dual-brand concept in Seguin, Texas, combining IHOP and Applebee’s, which achieved three times the revenue of a standalone IHOP location. Analysts noted the dual-branded store strategy’s encouraging performance, although development plans for 2025 suggest potential contraction. For 2025, Dine Brands anticipates adjusted EBITDA between $235 million and $245 million, with projections indicating a cautious outlook for sales growth.
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