Krispy Kreme Doughnuts Inc. (NYSE: KKD) had a great run and the donut empire was set to make many investors rich as shares rose from $10 to about $50, but that was from 2001 to 2003. After things petered out for the company, shares then slid and slid, and the price of Krispy Kreme stock went down to about as low as the price of one of its donuts. Now Krispy Kreme is back, and its company earnings report has the stock back up at multiyear highs.

What we want to know is whether investors should start chasing the stock again, or should they treat Krispy Kreme shares like a diabetic should treat a donut? Is this a value stock, a growth stock or just a turnaround stock?

The company earnings report showed a 33% gain in earnings and raised guidance. Krispy Kreme is now targeting full-year earnings of $0.59 to $0.63 per share. That compares to a consensus estimate of about $0.56 and to a prior range of $0.53 to $0.57 per share. Adjusted earnings in the past year were reported as $0.47 per share.

We would bring up at least one word of caution here, even if you consider this a continued turnaround. At the $14.26 closing price, Krispy Kreme now trades at over 22.5 times this year’s highest point of the company’s new guidance. If you factor in the higher share price from Friday morning at multiyear highs, that forward earnings multiple is about 24.5 times earnings.

Friday’s gain is currently up more than 8% at $15.49, and that is above the 52-week range of $5.86 to $15.33. More importantly, its prior $932 billion market cap is now challenging the $1 billion mark. Krispy Kreme’s stock has also run into resistance in March and April, when shares reached above $15.00. That resistance is likely due to severe profit taking, as every single investor who bought shares any time since 2004 was suddenly sitting on big profits.

Krispy Kreme is acting as though it wants to break out. Our question is really how much investors will pay up for a donut stock that made and took away many investor fortunes a decade ago. Maybe the more things change the more they stay the same.

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