Yahoo Finance Breakeven Is Near for Krispy Kreme, Inc. (NASDAQ:DNUT)
We feel now is a pretty good time to analyse Krispy Kreme, Inc.'s (NASDAQ:DNUT) business as it appears the company may be on the cusp of a considerable accomplishment. Krispy Kreme, Inc., together with its subsidiaries, produces doughnuts in the United States, the United Kingdom, Australia, New Zealand, Mexico, and internationally. On 01 January 2023, the US$2.5b market-cap company posted a loss of US$16m for its most recent financial year. The most pressing concern for investors is Krispy Kreme's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for Krispy Kreme
Krispy Kreme is bordering on breakeven, according to the 9 American Hospitality analysts. They expect the company to post a final loss in 2022, before turning a profit of US$12m in 2023. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 111% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Krispy Kreme's growth isn’t the focus of this broad overview, though, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Krispy Kreme currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Krispy Kreme's case is 57%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Krispy Kreme to cover in one brief article, but the key fundamentals for the company can all be found in one place – Krispy Kreme's company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:
Valuation: What is Krispy Kreme worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Krispy Kreme is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Krispy Kreme’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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