Krispy Kreme (NASDAQ:DNUT) Trading Up 6% - Here's Why

Key Points

• Shares rose about 6% midday to roughly $3.83, though trading volume was down sharply (~726,000 shares vs. a 2.28M average).
• Analysts are mixed after several upgrades and downgrades, but the consensus rating is "Hold" with an average price target of $4.85.
• Krispy Kreme beat the quarter on EPS ($0.09 vs. $0.03 est.) and revenue, but still shows weak liquidity and profitability with a current ratio of 0.38 and a net margin of -33.87%.

Shares of Krispy Kreme, Inc. (NASDAQ:DNUT - Get Free Report) were up 6% during mid-day trading on Monday . The company traded as high as $3.78 and last traded at $3.8260. Approximately 726,366 shares changed hands during trading, a decline of 68% from the average daily volume of 2,282,628 shares. The stock had previously closed at $3.61.

Analyst Upgrades and Downgrades

Several analysts recently weighed in on the company. Wall Street Zen upgraded Krispy Kreme from a "sell" rating to a "hold" rating in a research note on Sunday, February 22nd. Morgan Stanley reissued an "underweight" rating and issued a $3.00 price target on shares of Krispy Kreme in a research note on Tuesday, January 20th. Zacks Research raised Krispy Kreme from a "hold" rating to a "strong-buy" rating in a research note on Friday, March 27th. Capital One Financial upgraded Krispy Kreme from an "equal weight" rating to an "overweight" rating and set a $6.00 price objective for the company in a report on Thursday, March 26th. Finally, Weiss Ratings restated a "sell (d)" rating on shares of Krispy Kreme in a research note on Friday, March 27th. One investment analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating, three have given a Hold rating and three have issued a Sell rating to the company. Based on data from MarketBeat, the stock presently has a consensus rating of "Hold" and an average price target of $4.85.

Krispy Kreme Price Performance

The company's 50-day moving average is $3.33 and its 200-day moving average is $3.68. The company has a current ratio of 0.38, a quick ratio of 0.32 and a debt-to-equity ratio of 1.40. The firm has a market cap of $670.72 million, a price-to-earnings ratio of -1.28 and a beta of 1.27.

Krispy Kreme (NASDAQ:DNUT - Get Free Report) last issued its quarterly earnings results on Thursday, February 26th. The company reported $0.09 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.03 by $0.06. Krispy Kreme had a negative return on equity of 3.66% and a negative net margin of 33.87%.The company had revenue of $392.37 million for the quarter, compared to analyst estimates of $386.72 million. During the same quarter last year, the company posted $0.01 EPS. The company's revenue for the quarter was down 2.9% compared to the same quarter last year. Equities research analysts predict that Krispy Kreme, Inc. will post 0.07 earnings per share for the current year.

Institutional Trading of Krispy Kreme

Large investors have recently bought and sold shares of the business. Russell Investments Group Ltd. grew its stake in Krispy Kreme by 1,229.5% during the third quarter. Russell Investments Group Ltd. now owns 8,469 shares of the company's stock worth $33,000 after purchasing an additional 7,832 shares during the period. FNY Investment Advisers LLC bought a new position in shares of Krispy Kreme during the 4th quarter worth approximately $40,000. Sage Mountain Advisors LLC bought a new position in shares of Krispy Kreme during the 3rd quarter worth approximately $39,000. Prudential Financial Inc. acquired a new stake in shares of Krispy Kreme during the 2nd quarter worth approximately $32,000. Finally, Captrust Financial Advisors acquired a new stake in shares of Krispy Kreme during the 2nd quarter worth approximately $34,000. 81.72% of the stock is currently owned by institutional investors and hedge funds.

About Krispy Kreme

Krispy Kreme Doughnuts, Inc NASDAQ: DNUT is a global retailer and wholesaler renowned for its signature Original Glazed doughnut and a variety of other sweet treats. The company operates through a combination of company-owned stores, franchise outlets and strategic partnerships with supermarkets, convenience stores and other foodservice channels. In addition to its doughnut portfolio, Krispy Kreme offers freshly brewed coffee, assorted beverages and proprietary seasonal items designed to drive traffic and foster brand loyalty.

Founded in 1937 in Winston-Salem, North Carolina, by Vernon Rudolph, Krispy Kreme has grown from a single local shop to a multinational brand.

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