Value
4.8/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 1.2 |
| Fwd P/E | 1.1 |
| PEG | 8.7 |
| Analyst target | 3.0 |
- ▸Forward P/E: 77.2x
- ▸PEG: 0.72
DNUT · Why this verdict
Why Krispy Kreme (DNUT) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score4.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Krispy Kreme is a low-quality, shrinking business with a weak Piotroski score, 19% short interest and supplier concentration, with only 11.1% upside to the analyst target and earnings in 4 days.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Krispy Kreme has no competitive moat and a Piotroski F-Score of just 3 out of 9, and its quality score of 1.0 is below the 4.0 minimum. Quality breakdown | The Piotroski score improves to 5 or higher over the next 12 months. | →Stable |
| CounterA turnaround, refranchising, or cost cutting could lift profitability quickly from a depressed base. | ||
Revenue is declining about 13%, and the forward P/E is 71.9x, so the valuation is not supported by earnings. Growth breakdown | Revenue decline narrows to less than 5% over the next 12 months. | →Stable |
| CounterThe PEG of 0.67 suggests analysts expect a sharp earnings recovery, and the revenue decline may reflect closed locations rather than demand. | ||
The business depends on a single vendor for glaze flavoring and a single distribution vendor in the U.S. and Canada. Bear case | No supply disruption occurs and the vendor mix is diversified. | ↓Deteriorating |
| CounterLong-term supply contracts with these vendors are common for the industry and disruptions have been rare. | ||
Short interest is 19%, implied volatility is 99%, and the stock is below its 200-day average in a confirmed downtrend. Key risks | Short interest declines below 12% and the price recovers above its 200-day average. | ↓Deteriorating |
| CounterHeavy short interest with rising on-balance volume and institutional accumulation can set up a squeeze. | ||
The analyst target of $3.64 is 11.1% above the $3.275 price, against 14.2% downside to the stop, with earnings 4 days away. Targets | The upcoming report beats the loss estimate, with EPS better than -$0.02. | ↓Deteriorating |
| CounterRecent results were mixed, with a 136% miss in the prior quarter, and the next report could be another miss. | ||
Krispy Kreme has no competitive moat and a Piotroski F-Score of just 3 out of 9, and its quality score of 1.0 is below the 4.0 minimum.
→StableQuality breakdown
- Expectation
- The Piotroski score improves to 5 or higher over the next 12 months.
CounterA turnaround, refranchising, or cost cutting could lift profitability quickly from a depressed base.
Revenue is declining about 13%, and the forward P/E is 71.9x, so the valuation is not supported by earnings.
→StableGrowth breakdown
- Expectation
- Revenue decline narrows to less than 5% over the next 12 months.
CounterThe PEG of 0.67 suggests analysts expect a sharp earnings recovery, and the revenue decline may reflect closed locations rather than demand.
The business depends on a single vendor for glaze flavoring and a single distribution vendor in the U.S. and Canada.
↓DeterioratingBear case
- Expectation
- No supply disruption occurs and the vendor mix is diversified.
CounterLong-term supply contracts with these vendors are common for the industry and disruptions have been rare.
Short interest is 19%, implied volatility is 99%, and the stock is below its 200-day average in a confirmed downtrend.
↓DeterioratingKey risks
- Expectation
- Short interest declines below 12% and the price recovers above its 200-day average.
CounterHeavy short interest with rising on-balance volume and institutional accumulation can set up a squeeze.
The analyst target of $3.64 is 11.1% above the $3.275 price, against 14.2% downside to the stop, with earnings 4 days away.
↓DeterioratingTargets
- Expectation
- The upcoming report beats the loss estimate, with EPS better than -$0.02.
CounterRecent results were mixed, with a 136% miss in the prior quarter, and the next report could be another miss.
Per-dimension breakdown
Quality
1.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 1.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 1.4 |
| Moat | 2.5 |
| Piotroski F | 3.3 |
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 3/9
- ▸Quality concerns
Growth
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 10.0 |
- ▸Declining revenue: -13%
Momentum
8.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.9 |
| MACD | 9.3 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 10.0 |
| vol acceleration | 10.0 |
- ▸Overbought (RSI 83)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 83 (late-cycle distribution risk)
- ▸Volume surge (6.7x avg) on up move
Sentiment
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.5 |
| Analyst rating | 5.0 |
| Price target | 3.7 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
1.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.0 |
| quality rank | 1.1 |
| growth rank | 0.0 |
Technical
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 1.9 |
| 52w position | 8.0 |
| gap | 5.0 |
Risk (lower is worse)
2.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.6 |
| days to cover | 1.2 |
| volatility | 0.0 |
| put call | 3.7 |
| implied vol | 0.0 |
| beta | 5.7 |
| debt equity | 3.0 |
- ▸High short interest justified: 19%
- ▸High IV: 112%
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| surprise avg | 10.0 |
| news activity | 8.0 |
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- MOMENTUM:8.5>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.4=NEGATIVE
Warning (1)
- DEATH_CROSS:momentum=8.5>=5.0 recovering
Reward-to-Risk
-1.39
Upside
-20.9%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 83
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.32>1.3, MCap $0.6B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -1.4=NEGATIVE outcome against Momentum at 8.5 and asymmetric R:R of -1.39.
The strongest dimensions are Momentum at 8.5, Insider at 7.3, and Catalyst at 7.2; the weakest are Quality at 1.0, Peer rank at 1.3, and Risk (lower is worse) at 2.2. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.39 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Weak Business Quality
Trip ifPiotroski F-Score falls below 2 from the current 3.
- P2Declining Revenue
Trip ifRevenue decline exceeds 20% year over year from the current 13%.
- P3Supplier Concentration Risk
Trip ifA supply disruption cuts revenue by more than 5% in any quarter.
- P4High Short Interest Risk
Trip ifShort interest rises above 25% from the current 19%.
- P5Modest Target Upside
Trip ifPrice drops to below the $3.05 stop level from the current $3.275.