Is Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) Potentially Undervalued?

Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL), is not the largest company out there, but it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Cracker Barrel Old Country Store’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Cracker Barrel Old Country Store

Is Cracker Barrel Old Country Store Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 11.38% above our intrinsic value, which means if you buy Cracker Barrel Old Country Store today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $69.21, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Cracker Barrel Old Country Store’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of Cracker Barrel Old Country Store look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 5.9% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Cracker Barrel Old Country Store, at least in the short term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in CBRL’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on CBRL, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Cracker Barrel Old Country Store as a business, it's important to be aware of any risks it's facing. For example, we've found that Cracker Barrel Old Country Store has 2 warning signs (1 is a bit concerning!) that deserve your attention before going any further with your analysis.

If you are no longer interested in Cracker Barrel Old Country Store, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.