Cracker Barrel has gotten torched over the last six months - since August 2025, its stock price has dropped 48.1% to $30.00 per share. This was partly driven by its softer quarterly results and may have investors wondering how to approach the situation.
Is now the time to buy Cracker Barrel, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Do We Think Cracker Barrel Will Underperform?
Even with the cheaper entry price, we're cautious about Cracker Barrel. Here are three reasons why CBRL doesn't excite us and a stock we'd rather own.
1. Same-Store Sales Falling Behind Peers
Same-store sales is a key performance indicator used to measure organic growth at restaurants open for at least a year.
Cracker Barrel’s demand within its existing dining locations has been relatively stable over the last two years but was below most restaurant chains. On average, the company’s same-store sales have grown by 1.2% per year.
2. EPS Trending Down
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Sadly for Cracker Barrel, its EPS declined by 22.6% annually over the last six years while its revenue grew by 1.8%. This tells us the company became less profitable on a per-share basis as it expanded.
3. High Debt Levels Increase Risk
As long-term investors, the risk we care about most is the permanent loss of capital, which can happen when a company goes bankrupt or raises money from a disadvantaged position. This is separate from short-term stock price volatility, something we are much less bothered by.
Cracker Barrel’s $1.18 billion of debt exceeds the $8.94 million of cash on its balance sheet. Furthermore, its 6× net-debt-to-EBITDA ratio (based on its EBITDA of $185.7 million over the last 12 months) shows the company is overleveraged.
At this level of debt, incremental borrowing becomes increasingly expensive and credit agencies could downgrade the company’s rating if profitability falls. Cracker Barrel could also be backed into a corner if the market turns unexpectedly – a situation we seek to avoid as investors in high-quality companies.
We hope Cracker Barrel can improve its balance sheet and remain cautious until it increases its profitability or pays down its debt.
Final Judgment
Cracker Barrel falls short of our quality standards. After the recent drawdown, the stock trades at 17.2× forward EV-to-EBITDA (or $30.00 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think other companies feature superior fundamentals at the moment. We’d suggest looking at a top digital advertising platform riding the creator economy.
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