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Krispy Kreme Doughnuts, Inc. Message Board

  • scoo2ner scoo2ner Jan 25, 2011 6:37 PM Flag

    High Price/Earnings

    I like KKD but according to Charles Schwab the
    price/earnings is at 48.93 and forward P/E
    at 37.97. Aren't these "scary high"-
    or not? (stock price at 6.58)

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    • As the engine starts to hum, E can go up very quickly. More info for you below from IBD, and previous post.

      Jan 08, 2011 (SmarTrend(R) News Watch via COMTEX) -- Below are the five companies in the Restaurants industry with the highest projected earnings growth. The growth of earnings per share (current fiscal year estimated vs. last year actual) is important to gauge future profitability and relative value. Higher EPS growth generally justifies higher earnings multiples.

      Krispy Kreme Doughnuts (KKD) has the highest projected earnings growth of 246.0%; Morton's Restaurant (MRT) is next with projected earnings growth of 193.0%; and Domino's Pizza (DPZ) has the next highest with projected earnings growth of 54.6%.

      BJ's Restaurants (BJRI) follows with projected earnings growth of 49.4% and Jack in the Box (JACK) rounds out the group with projected earnings growth of 45.0%.

      SmarTrend currently has shares of Krispy Kreme Doughnuts in an Uptrend and issued the Uptrend alert on August 03, 2010 at $4.07. The stock has risen 66.8% since the Uptrend alert was issued.

      • 1 Reply to Networthdev
      • The concensus Forward P/E (which is generally what the market cares more about) for KKD is actually 22. Trailing P/E is about 48.

        You have to be careful when using P/E as the sole metric for determining if a company is over valued or not.

        For growth companies and those in a turnaround (unprofitable to profitable), trailing P/E is about as useful as a parka coat in the middle of a desert. Forward P/E is more reliable but still not perfect.

13.21Feb 11 4:02 PMEST