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    Krispy Kreme Is Undervalued

    Krispy Kreme ($DNUT) is going to start phasing into Mcdonalds restaurants in the second half of 2024. They did a pilot run and shockingly, McDonalds customers responded well to fried dough covered in lots of sugar. By 2026, they will be in 12,000 Mcdonalds restaurants, almost doubling their locations. The company is at about break even right now because they are spending money to be able to deliver lots of fresh donuts to many locations nationwide. They are in the process of updating their business model to focus more on delivering donuts to places where people are rather than having people come to their locations. They will be able to deliver fresh, superior donuts, to pretty much every location in the US. The stock is at an all time low because of the Ozempic mania fear, weakening consumer fears, and a lack of demand for unprofitable companies due to the high interest rates. If management is able to successfully transition their business model and execute well on the McDonalds partnership, Krispy Kreme could become valued closer to something like Wingstop or Chipotle. Their infrastructure to be able to deliver fresh pastries, made and delivered daily to where ever the consumers are, could become very valuable if management executes well.

    Positions: 3500 shares @ $10.03. Implied volatility on the options is pretty low but I prefer a larger position rather than paying for leverage with options.

    Krispy Kreme Is Undervalued
    byu/pareofdocks inwallstreetbets



    Posted by pareofdocks

    View 27 Comments

    27 Comments

    2. Firemeupbaby2009 on

      I own Krispy Kreme and Dutch Bros. They have to execute and deliver profits, if they do that your analysis is correct. My worry is these weight loss drugs could lead to lower donut sales around the country. That would mean bigger losses for these brands. I keep my position small in both of these stocks. If they execute it will be a good decision, if the weight loss drugs win then they will not be good investments.

    10. Straight-Opposite483 on

      Did you just compare a place that sells donuts and coffee to one of the leading fast food chains in the world? McDonald’s has very few comparables – I can find a donut shop on almost every other corner and most are better and cheaper than KK. They have 0 moat. You can probably start a donut shop for $20k all in.

    11. killerbeeswaxkill on

      I worked at Krispy Kreme one summer ago. I wasn’t on the payroll or anything but I provided the Kreme behind the dumpster.

    14. Jebusfreek666 on

      There is no way you can truly think they could be valued close to Chipotle, that is just crazy talk.

    15. bosssssssssssman on

      Calls since China discovered a cure for diabetes. Donuts for everyone!!

    16. tacocookietime on

      McDonald’s board has been taken over by Boston consulting group. Same with five guys.

      Everything BCG touches turns to shit.

      I don’t know if BCG has any association with Krispy Kreme but make sure you account for this before investing.

    17. elysiansaurus on

      I agree. Mcdonalds partnership cranked them to 17 and now they are below pre partner price.

    18. Androcles_InTheSky on

      If something helps in this DD. They double bottomed at 10$ nice entry. Calls for sep def will print.

    19. sticky0120_ on

      Speaking of McDonalds…BCG just planted a dirtbag in the corporate offices. I bet McDonalds stock price starts going down. BCG wrecks companies for the benefit of shorts.

    20. Charming_Raccoon4361 on

      ask roaring kitty to post a picture of a falling donut, maybe stock go up

      CEO promised 80%, I highly doubt they get half of that after McDonalds partnership

    24. YourWifeyBoyfriend on

      We went to Krispy Kreme 2 days ago, they sold us some glazed donuts that had the glaze slipping and were stale. I wondered wtf had happened to them, they were so good when fresh and hot, but even my two year old said “that’s nasty” and barely ate his.

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