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Last week, you might have seen that Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) released its first-quarter result to the market. The early response was not positive, with shares down 2.4% to US$152 in the past week. It looks like the results were a bit of a negative overall. While revenues of US$749m were in line with analyst predictions, earnings were less than expected, missing estimates by 9.2% to hit US$1.79 per share. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest forecasts to see whether analysts have changed their mind on Cracker Barrel Old Country Store after the latest results.
After the latest results, the nine analysts covering Cracker Barrel Old Country Store are now predicting revenues of US$3.18b in 2020. If met, this would reflect a reasonable 3.1% improvement in sales compared to the last 12 months. Earnings per share are forecast to reduce 3.9% to US$8.77 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of US$3.18b and earnings per share (EPS) of US$8.91 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$172, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Cracker Barrel Old Country Store, with the most bullish analyst valuing it at US$210 and the most bearish at US$148 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Cracker Barrel Old Country Store's rate of growth is expected to accelerate meaningfully, with forecast 3.1% revenue growth noticeably faster than its historical growth of 2.2%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.2% per year. So it's clear that despite the acceleration in growth, Cracker Barrel Old Country Store is expected to grow meaningfully slower than the market average.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Cracker Barrel Old Country Store's revenues are expected to perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for Cracker Barrel Old Country Store going out to 2022, and you can see them free on our platform here.
You can also see whether Cracker Barrel Old Country Store is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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