DNUT Stock Jumps 11.5%: Is Krispy Kreme Riding a Meme Stock Wave?

Krispy Kreme just got a little sweeter not just on shelves, but in the stock market too. In a surprising turn, DNUT stock surged by 11.5% in one day, grabbing attention from both investors and donut lovers alike.

At first glance, it looks like just another market jump. But dig a little deeper, and we start to see something familiar: a wave of online chatter, Reddit threads, and retail investors jumping in. It feels a lot like the early days of GameStop or AMC. So, we’re left wondering: Is Krispy Kreme the next big meme stock?

Let’s break it all down what caused the stock jump, what the company’s really worth, and whether this rally is built on sugar or strategy. Let’s take a closer look and see if we’re dealing with a short-term sugar rush or a long-term growth story.

Recent Stock Surge: What Happened?

We saw DNUT stock rise 11.5% on July 22, peaking at $3.61 before closing around $3.64. Trading volume reached about 1.28 million shares, though that’s lower than its usual 2.8 million.

Yet on the same day, DNUT also had a 26.7% intraday jump, and extended its gains into after-hours by 24%. Again no big company news came out. It seems clear: retail investors spread a meme-style rally.

Krispy Kreme’s Fundamentals

Krispy Kreme made around $1.7 B in revenue in 2024, up 5% from the year before. In Q4, they pulled in $404 M, though they lost $22 M on GAAP and earned $45.9 M in adjusted EBITDA. Their net cash flow was $27 M, steady, but not striking.

Still, DNUT has a lot of debt around $935 M and it cut its dividend earlier this year. Its profit margin is small and unstable: the stock trades at a negative P/E of about -30. So on paper, there is risk. But the company is pushing growth via “hub and spoke” outlets, adding new doughnut plants and partnerships with Costco and grocery stores.

The Meme Stock Checklist: Does DNUT Qualify?

Let’s look at the “meme stock” traits:

1. Retail buzz – check. Reddit, X, and Stocktwits exploded with DNUT chatter.
2. High short interest – yes, around 26% of float is shorted. That sets up a short squeeze potential.
3. No new company news – correct. No earnings beat or new deals, just more hype 
4. Momentum > fundamentals – definitely. This feels driven more by social fear-of-missing-out than profits or sales.

These signs mirror early GameStop and AMC trends. So yes, Krispy Kreme is looking like a meme stock at least for now.

The Role of Retail Investors and Sentiment

We find this interesting. Reddit’s r/wallstreetbets saw a surge in posts like “Do or $DNUT. There is no Try”. On Stocktwits, sentiment turned from bearish to extremely bullish fast with over 3,500% jump in message volume and a bullish score of 96/100.

We’re seeing real momentum from retail investors, fueled by social pressure, hype, and FOMO. That mirrors behaviors in past meme rallies.

Analyst and Institutional Perspectives

Wall Street is mixed. Citigroup rates DNUT “neutral” with a target of $3.60. Bank of America kept “buy” at $6. Morgan Stanley says “outperform” with $2.50 ­and BNP Paribas is neutral at $3.50. On average, analysts see room up to $8.29 suggesting a moderate buy rating today.

Institutions hold about 82% of DNUT shares. Spartan Fund, GAMMA Investing, and Ameriprise all recently bought in. Even big insider shareholder Indulgence B.V. Jab sold some shares recently. This tells us both retail and institutions are watching closely.

Risks of Chasing the Hype

We have to admit, the ride may be fun but it’s risky. Meme stocks often swing wildly. DNUT’s 26.7% rise in one day, plus 24% in after-hours, shows how extreme things can get.

There’s no major business news to support this gain. Fundamentals are shaky debt, low profits, weak margins. A sudden pull-back could hit hard, especially if retail hype fades or if short sellers cover.

Conclusion: Sweet Ride or Sticky Situation?

Is DNUT the next meme stock? It sure checks the boxes: buzz, hype, high short interest, and social media push. But Krispy Kreme is still a struggling business with debt, narrow margins, and no major growth report.

For us, this smells like a short-term sugar rush, not long-term value. Great for momentum traders, but not for steady investors. If we enter now, we must be ready to exit fast. We value fundamentals, but today’s market is all about sentiment so let’s stay clean and cautious.

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This content is for informational purposes only and not financial advice. Always conduct your research.