QS Research · Michael Burry's Scion Capital analyst template · 2006
Krispy Kreme, Inc. (DNUT)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case 0% · downside -44% · upside +135%
At $4.17 the market is paying 17.5x TTM EV/EBITDA on $89.0M EBITDA; at that same multiple the base value is 17.5 x $89.0M = $1.5575B EV, less $837.6M net debt = $719.9M equity, or $4.15/share (-0.5%), so the stock is roughly fairly priced on current earnings power. The 2026-11-06 guidance raise to $1.35-$1.40B revenue and $140-$150M Adjusted EBITDA is a real dated catalyst, but it is not yet in GAAP TTM EBITDA and the equity still sits behind $837.6M net debt plus $447.1M of leases. Downside is severe if EBITDA falls 20% to $71.2M: 17.5 x $71.2M = $1.246B EV, less $837.6M = $408.4M equity, or $2.35/share (-44%). Upside to $9.80 assumes the $145M Adjusted EBITDA midpoint is reached and capitalized at today's 17.5x, which is a forecast, not current earnings. This is a watch: base is flat, downside breaches -25%, and upside exceeds +25%, so the long/short rule is not met.
Key numbers
- Share price: $4.17
- Market cap: $723.5M
- Latest financial period: TTM to Sep 27, 2026
- Revenue (TTM): $1.42B
- EV / EBITDA (TTM): 17.5x
- Price / book: 1.18x
The 15 boxes
- ✓ 1. Long-form business notes
Krispy Kreme is an omni-channel doughnut business with 15,194 global points of access at the end of fiscal 2025 and FY2025 revenue of $1,522.6 million across U.S., International and Market Development segments. It earns product sales through shops, fresh delivery and digital, plus franchise fees, royalties and equipment/mix sales, and is refranchising toward a capital-light model. The older 10-K dated 2022-03-11 shows a smaller >10,000-point, >30-country footprint; the latest XBRL shows revenue of $1.69B in the fiscal year ended 2023-12-31, the highest in the six-year data, before $1.52B in the fiscal year ended 2025-12-28, with a $469.3M operating loss in the latest year.
- ✓ 2. Competitive advantage
No durable competitive advantage shows up in the numbers. The brand and proprietary doughnut IP (Original Glazed marks registered in over 65 countries, trade-secret formulas) and its position as exclusive/primary supplier of doughnut mixes and sole maker of doughnut-making equipment give it leverage over franchisees, but there is no evidence of pricing power: revenue peaked at $1.69B in FY2023 and fell to $1.52B in FY2025, with operating income of -$8.7M in FY2024 and -$469.3M in FY2025 (a year the 10-K flags significant goodwill/long-lived impairment charges). Cash economics are thin for a capital-heavy system — FY2025 operating cash flow of $33.9M against $97.9M of capex — and the 10-K describes competition as a fragmented indulgence industry of doughnut/sweet-treat retailers, coffee shops, c-stores, supermarkets and digital channels.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended Sep 27, 2026) revenue fell 12.4% to $328.8M but almost all of that is refranchising: organic revenue was down only 0.1%, U.S. organic up 0.9%, Market Development organic up 14.0%, International organic down 5.4%. GAAP still shows an operating loss of $(9.0)M and a net loss of $(13.3)M, while Adjusted EBITDA of $35.3M was down 13.1% only because Q3 2025 held a $9.3M cyber insurance recovery — excluding it Adjusted EBITDA rose $4.0M and margin rose 240 bps to 10.7%. Free cash flow for the nine months was $(10)M (improved $82M) on operating cash flow of $18.7M and capex cut 64.6% to $28.6M, with $250.5M total liquidity and 5.5x net leverage; FY2026 revenue guidance was raised and narrowed to $1.35–$1.40B.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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