What Is Cracker Barrel Old Country Store, Inc.'s (NASDAQ:CBRL) Share Price Doing?

Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$120 and falling to the lows of US$90.46. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Cracker Barrel Old Country Store's current trading price of US$97.02 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? 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 there are any catalysts for a price change.

See our latest analysis for Cracker Barrel Old Country Store

What's The Opportunity In Cracker Barrel Old Country Store?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Cracker Barrel Old Country Store’s ratio of 22.63x is trading slightly above its industry peers’ ratio of 20.57x, which means if you buy Cracker Barrel Old Country Store today, you’d be paying a relatively sensible price for it. And if you believe that Cracker Barrel Old Country Store should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. Is there another opportunity to buy low in the future? Since Cracker Barrel Old Country Store’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Cracker Barrel Old Country Store generate?

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. With profit expected to grow by 46% over the next couple of years, the future seems bright for Cracker Barrel Old Country Store. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? CBRL’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at CBRL? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on CBRL, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the optimistic forecast is encouraging for CBRL, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Cracker Barrel Old Country Store, you'd also look into what risks it is currently facing. To that end, you should learn about the 3 warning signs we've spotted with Cracker Barrel Old Country Store (including 1 which is a bit unpleasant).

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.