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ZYBERNO

Stock Report

Updated Aug 29, 2026

Luckin Coffee Inc. (LKNCY)

OTC

$35.25

Luckin Coffee Inc. is a Chinese coffee chain headquartered in Xiamen, Fujian, China, operating as China's largest coffee chain by store count. After recovering from a 2020 accounting scandal, Luckin became profitable and grew to over 20,000 stores across China, surpassing Starbucks China in store count, primarily through its mobile-app based, pickup-first model and aggressive promotions.

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

35.0/100

WEAK BUSINESS

Luckin Coffee Inc. (LKNCY) scores 35/100 — weak fundamentals with mixed indicators requiring careful analysis before acting.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full LKNCY quality analysis & detailed breakdown

VALUATION SIGNAL

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

Margin of Safety unavailable — insufficient data for the owner-earnings DCF.

BRINA GAP ↗

Is the market underestimating or overestimating what this business is capable of going forward?

-3.4%

Slight Overestimate

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full LKNCY valuation analysis · → View full LKNCY Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):CRITICAL (0.0%)

Debt-to-Equity (Solvency Risk):AVERAGE (0.93x)

Operating Margin (Operational Efficiency):CRITICAL (0.0%)

Return on Capital (Capital Efficiency):GOOD (16.8%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

Luckin Coffee Inc. (LKNCY) stock report — Zyberno Score 35/100 (WEAK BUSINESS). Full financial analysis on Zyberno.

According to Zyberno's DCF model, Luckin Coffee Inc. (LKNCY) shows a Brina Gap of -3.4%, which weakens the case: based on the company's ROIC (16.8%) and reinvestment rate (30.8%), the business can fundamentally grow at 5.2% — but the current enterprise value implies the market expects 8.5%.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:35.25

Market Cap:$10.05B

Valuation Multiples (2)

P/B Ratio:4.51x

Peg Ratio:-999.00x

Enterprise Metrics (3)

Enterprise Value:$10.76B

Ev Ebitda Ratio:13.23x

Pfcf Ratio:20.32x

Price Action & Momentum (3)

12-1 Momentum:

-11.2% (19th pctile)

📈 Click to view full LKNCY Momentum analysis →

Momentum Percentile:19 / 100

% of 52-Week High:80.8%

B. Profitability Assessment

Return Metrics (5)

Roic:

16.8%

📊 Click to view full LKNCY ROIC analysis →

Reinvestment Rate:30.8%

Fundamental Growth Rate (g):5.2%

Market-Implied Growth Rate:8.5%

Brina Gap:

-3.4%

☷ Click to view full LKNCY Brina Gap analysis →

Margin Analysis (1)

Ebitda Margin:11.6%

Yield Metrics (2)

Earnings Yield:-$999.00

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:1.70x

Quick Ratio:1.35x

Cash Ratio:0.27x

Leverage Analysis (3)

Debt To Equity Ttm:0.93x

Debt-to-Equity Ratio:0.93x

Debt To Ebitda:1.27x

Coverage Ratios (2)

Interest Coverage Ratio:40,225.17x

Times Interest Earned:40,225.17

Capital Structure (4)

Working Capital:845,571,000.00

Cash And Cash Equivalents:327,436,000.00

Long Term Debt:$615.99M

Net Debt:$709.37M

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

$7.03B

Cost Of Revenue Ttm:$0.00

Profitability Breakdown (2)

$0.00$724.05M

Bottom Line Performance (3)

$513.88M

Income Before Tax:$753.63M

Ebitda Ttm:813,534,996.00

Operating Expenses (5)

Operating Expenses:6,310,772,000.00

R And D Expense:0.00

Sga Expense:436,324,000.00

Income Tax Expense:$239.76M

Interest Expense:18,000.00

Expense Ratios (3)

R And D To Revenue Percentage:0.0%

Sga To Revenue Percentage:6.2%

Ebitda Margin:11.6%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$4.32B

Current Assets:$2.06B

Ppe Net:897,761,000.00

Goodwill:0.00

Intangible Assets:$0.00

Liability Structure (4)

Total Liabilities:1,878,628,000.00

Current Liabilities:1,214,139,000.00

Long Term Debt:$615.99M

Short Term Debt:$420.82M

Equity & Capital (3)

Equity:$2.23B

Retained Earnings:-$348.11M

Common Stock:0.00

Working Capital Items (3)

Accounts Receivable:22,313,000.00

Inventory:423,406,000.00

Accounts Payable:157,539,000.00

Special Items (2)

Contract Liabilities:22,300,000.00

Stock Based Compensation:81,805,000.00

C. Cash Flow Analysis

Operating Activities (2)

$869.37M$494.90M

Investment Activities (1)

Investing Cash Flow:-$1.11B

Financing Activities (3)

Financing Cash Flow:-$47.62M

Dividends Paid Ttm:0.00

Stock Repurchase:0.00

Capital Transactions (3)

Common Stock Issuance:426,196,672.84

Long Term Debt Issuance:$4.60M

Long Term Debt Repayments:$4.80M

Non-Cash Items (1)

Depreciation Amortization Ttm:89,481,996.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (1)

Earnings Per Share Ttm:$1.80

Revenue & Cash Per Share (2)

Sales Per Share Ttm:24.66

Operating Cash Flow Per Share:$3.05

Book Value & Capital (2)

Book Value Per Share:$7.82

Cash Per Share:1.15

Dividend Policy (1)

Dividend Payout Ratio:-999.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:1.63x

Working Capital Turnover Ttm:8.32x

Receivables Management (2)

Receivables Turnover Ttm:315.28x

Days Sales Outstanding Ttm:1.16

Inventory Management (2)

Inventory Turnover Ttm:16.61x

Days Inventory Outstanding Ttm:21.97

Payables & Cash Cycle (2)

Days Payable Outstanding:8.17

Cash Conversion Cycle:14.95

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:100.00

Quality Score:100.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Damodaran Growth Analysis (4)

Reinvestment Rate:30.8%

Fundamental Growth Rate (g):5.2%

Market-Implied Growth Rate:8.5%

Brina Gap:

-3.4%

☷ Click to view full LKNCY Brina Gap analysis →

B. Log-Linear Regression Growth Analysis

C. Company Profile & Context

Corporate Information (6)

Symbol:LKNCY

Company Name:Luckin Coffee Inc.

Sector:Unknown

Industry:Retail-Eating & Drinking Places

Exchange:OTC

Country:Unknown

Market Classification (3)

Market Cap Category:N/A

Price Category:medium

Volume Category:N/A

Share Structure (3)

Shares Outstanding:285.24M

Shares Outstanding Basic:2.57B

Shares Outstanding Diluted:2.57B

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-08-29 16:31:03 UTC

Data Timestamp:2026-08-29T16:31:03.967040