There wouldn't be many who think Cracker Barrel Old Country Store, Inc.'s (NASDAQ:CBRL) price-to-earnings (or "P/E") ratio of 18.7x is worth a mention when the median P/E in the United States is similar at about 17x. Although, it's not wise to simply ignore the P/E without explanation as investors may be disregarding a distinct opportunity or a costly mistake.
Recent times haven't been advantageous for Cracker Barrel Old Country Store as its earnings have been falling quicker than most other companies. One possibility is that the P/E is moderate because investors think the company's earnings trend will eventually fall in line with most others in the market. If you still like the company, you'd want its earnings trajectory to turn around before making any decisions. If not, then existing shareholders may be a little nervous about the viability of the share price.
Keen to find out how analysts think Cracker Barrel Old Country Store's future stacks up against the industry? In that case, our free report is a great place to start.
What Are Growth Metrics Telling Us About The P/E?
Cracker Barrel Old Country Store's P/E ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the market.
Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 36%. This means it has also seen a slide in earnings over the longer-term as EPS is down 74% in total over the last three years. So unfortunately, we have to acknowledge that the company has not done a great job of growing earnings over that time.
Shifting to the future, estimates from the nine analysts covering the company suggest earnings growth is heading into negative territory, declining 5.1% over the next year. Meanwhile, the broader market is forecast to expand by 13%, which paints a poor picture.
In light of this, it's somewhat alarming that Cracker Barrel Old Country Store's P/E sits in line with the majority of other companies. It seems most investors are hoping for a turnaround in the company's business prospects, but the analyst cohort is not so confident this will happen. There's a good chance these shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the negative growth outlook.
The Key Takeaway
It's argued the price-to-earnings ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
Our examination of Cracker Barrel Old Country Store's analyst forecasts revealed that its outlook for shrinking earnings isn't impacting its P/E as much as we would have predicted. Right now we are uncomfortable with the P/E as the predicted future earnings are unlikely to support a more positive sentiment for long. This places shareholders' investments at risk and potential investors in danger of paying an unnecessary premium.
It is also worth noting that we have found 4 warning signs for Cracker Barrel Old Country Store (1 is potentially serious!) that you need to take into consideration.
It's important to make sure you look for a great company, not just the first idea you come across. So take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
当美国市场中位数报关17倍时,Cracker Barrel Old Country Store,Inc.(NASDAQ:CBRL)的市盈率18.7倍不值得一提。但如果不解释就简单地忽略市盈率,投资者可能会忽视一个明显的机会或者犯下昂贵的错误。
最近的时期对于Cracker Barrel Old Country Store来说不利,因为它的收益比大多数其他公司更快下降。其中一个可能的原因是市盈率适中,因为投资者认为公司的收益趋势最终将与市场上的大多数公司保持一致。如果您仍然喜欢这家公司,在做出任何决定之前,您希望其收益轨迹扭转。如果不是这样,那么现有股东可能会对股票的可行性有些紧张。
想了解分析师如何评价Cracker Barrel Old Country Store的未来?在这种情况下,我们的免费报告是一个很好的起点。
增长指标告诉我们市盈率的什么?
Cracker Barrel Old Country Store的市盈率在预计仅提供适度增长并且与市场表现相符的公司中是典型的。
有点令人担忧的是,Cracker Barrel Old Country Store的市盈率与大多数其他公司的市盈率保持一致。看来大多数投资者都希望公司的业务前景有所好转,但分析师的集体却不那么有信心。如果市盈率下跌到与负增长预测相符的水平,这些股东很可能会让自己陷入未来的失望之中。
重要提示
有人认为,市盈率是某些行业内价值的劣质测量,但它可以是一个强有力的企业情绪指标。
我们对Cracker Barrel Old Country Store的分析师预测进行的检查揭示了,预计未来收益的萎缩并没有像我们预测的那样对股票市盈率产生太大影响。现在我们对市盈率感到不舒服,因为预测的未来收益不太可能支持更积极的情绪。这使股东的投资面临风险,而潜在投资者则面临支付不必要溢价的危险。
值得注意的是,我们已经发现Cracker Barrel Old Country Store有4个预警信号(其中1个潜在严重!)需要考虑。