DNUT - Do Not Fall For Krispy Kreme's IPO Trap: A Legacy Brand That Will Remain Unprofitable

• At a current enterprise value of $4.3 billion or 4x LTM sales, Krispy Kreme remains overvalued vs. other QSR companies.
• Organic growth is only +1% this past year when you strip out revenues from its costly acquisition and shops opened less than twelve months ago.
• Krispy Kreme's high leverage will remain a concern due to its volatile operating cash flows over the past few years.
• Increased competition from both large established brands and smaller shops will continue to add pressure on profitability in the long term.
• Recommend a short position at $16.50 per share with a target price of $10.

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