Krispy Kreme (DNUT) is up more than 30% in Tuesday trading after the Winston-Salem, NC company announced a strategic partnership with worldwide fast-food chain McDonald’s. 

The rollout will begin in the back half of this year, at which point customers will be able to buy Krispy Kreme doughnuts at select McDonald’s. The partnership will be nationwide by 2026. The company is already working on its supply chain to support this deal.

Krispy Kreme CEO Josh Charlesworth says that he constantly sees consumers asking for a franchise in their town. This partnership will satisfy those cravings, as doughnut lovers will never have to look far again.

There are currently 7,372 points of access for the doughnuts across the country. But with more than 13,449 McDonald’s restaurants in the US, the landmark deal will more than double the points of access for Krispy Kreme.

Just a month ago Krispy Kreme reported a mixed bag of earnings in which inflation cut into profits and led to an earnings miss. The company reported just $0.09 EPS while analysts were expecting at least $0.13. The stock slid nearly 22%, but has turned things around since then.

There is a lot of buzz around Krispy Kreme today, as this deal represents a huge opportunity for the company to unlock revenue growth and offset some of the challenges that held it back in the last quarter. But is it enough to earn the stock a buy?

We’ve taken a look at DNUT through the VectorVest stock analysis software and found 3 things you need to see before you make your next move.

DNUT May Have Poor Upside Potential and Safety, But it Has Excellent Timing Right Now

VectorVest is a proprietary stock rating system designed to simplify your investment strategy. It saves you time and stress while empowering you to win more trade with less work. You’re given all the insights you need in 3 simple ratings: relative value (RV), relative safety (RS), and relative timing (RT).

Each sits on a simple scale of 0.00-2.00 with 1.00 being the average. This makes interpretation quick and easy - just pick safe, undervalued stocks rising in price! 

It gets better, though. You’re given a clear buy, sell, or hold recommendation based on the overall VST rating for any given stock at any given time. As for DNUT, here’s what we’ve uncovered:

  • Poor Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (based on a 3-year forecast), AAA corporate bond rates, and risk. It offers far superior insight than a standard comparison of price to value alone. DNUT has a poor RV rating of 0.65 right now.
  • Poor Safety: The RS rating is a risk indicator. It’s calculated by analyzing the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. DNUT also has a poor RS rating of 0.63.
  • Excellent Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement day over day, week over week, quarter over quarter, and year over year. This is where things get interesting, as DNUT has an excellent RT rating of 1.63 thanks to today’s news.

So, does excellent timing outweigh poor upside potential and safety, or is it the other way around? DNUT has an overall VST rating of 1.13 which is good, and the stock is currently rated a BUY in the VectorVest system. 

But, don’t miss out on more insights - a free stock analysis is just a click away ready to help you make your next move with confidence!

Want These Types of Insights at Your Fingertips so You Can Win More Trades?

Use VectorVest to analyze any stock free. VectorVest is the only stock analysis tool and portfolio management system that analyzes, ranks and graphs over 18,000 stocks each day for value, safety, and timing and gives a clear buy, sell or hold rating on every stock, every day.

VectorVest advocates buying safe, undervalued stocks, rising in price. DNUT gained nearly 30% Tuesday after announcing its strategic partnership with McDonald’s, which will more than double the points of access for the popular doughnut chain. The stock itself may have poor upside potential and safety, but its timing is excellent.

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