Krispy Kreme Inc $DNUT - A Valuation On 18th August 2021

Their glazed doughnuts are famous and loved by many, but the company is banking on an incredibly optimistic growth and profit story to prevent being crushed by their enormous debt pile.

Summary

Krispy Kreme, the famous producer of glazed doughnuts loved by many, has had an up-and-down corporate past. After an accounting scandal, they were taken private, acquired Insomnia Cookies, and went public with a dream-big expansion plan. For this valuation, I have taken an optimistic approach and assumed that their growth plan would work. Moreover, I am assuming that they'll be able to get their margins back to industry-average levels within five years and that despite the incredible capital intensity of this business, they won't need to reinvest that much to grow. However, if they don't pull it off, they'll be staring down the barrel of default and collapse again.

Market Price = $13.67
Estimated Value = $8.37
Price/Value = 163.3%
Monte-Carlo Price Percentile = 69%
Rating At Current Price = REDUCE/HOLD