NEW YORK (TheStreet) -- Shares of Krispy Kreme Doughnuts (KKD) have begun to rally Thursday afternoon after being down slightly earlier in the day. The stock reached a low of $19.60 but at last check was trading at $20.30, up 2.1%.
Krispy Kreme shares have seen a 30% rise over the past year and the North Carolina-based company announced that it is raising the amount of shares it plans to buy back to 80 million from 50 million.
Despite the company missing fourth-quarter earnings, shares after-hours on Wednesday rose 11%. Krispy Kreme raised its fiscal 2015 earnings outlook to 73 cents to 79 cents a share, up from earlier estimates of 71 cents to 76 cents. Analysts expect 75 cents a share.
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TheStreet Ratings team rates KRISPY KREME DOUGHNUTS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about its recommendation:
"We rate KRISPY KREME DOUGHNUTS INC (KKD) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.4%. Since the same quarter one year prior, revenues slightly increased by 6.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- KKD's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- Powered by its strong earnings growth of 28.57% and other important driving factors, this stock has surged by 28.83% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, KKD should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Hotels, Restaurants & Leisure industry average. The net income increased by 34.4% when compared to the same quarter one year prior, rising from $5.04 million to $6.78 million.
- You can view the full analysis from the report here: KKD Ratings Report