With a price-to-earnings (or "P/E") ratio of 25.1x Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) may be sending bearish signals at the moment, given that almost half of all companies in the United States have P/E ratios under 18x and even P/E's lower than 10x are not unusual. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's as high as it is.
With earnings that are retreating more than the market's of late, Cracker Barrel Old Country Store has been very sluggish. One possibility is that the P/E is high because investors think the company will turn things around completely and accelerate past most others in the market. If not, then existing shareholders may be very 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 High P/E?
Cracker Barrel Old Country Store's P/E ratio would be typical for a company that's expected to deliver solid growth, and importantly, perform better than 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 58%. The last three years don't look nice either as the company has shrunk EPS by 83% in aggregate. Accordingly, shareholders would have felt downbeat about the medium-term rates of earnings growth.
Looking ahead now, EPS is anticipated to climb by 22% per year during the coming three years according to the nine analysts following the company. Meanwhile, the rest of the market is forecast to only expand by 10% per annum, which is noticeably less attractive.
In light of this, it's understandable that Cracker Barrel Old Country Store's P/E sits above the majority of other companies. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.
The Final Word
Using the price-to-earnings ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.
We've established that Cracker Barrel Old Country Store maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. It's hard to see the share price falling strongly in the near future under these circumstances.
You should always think about risks. Case in point, we've spotted 4 warning signs for Cracker Barrel Old Country Store you should be aware of.
If P/E ratios interest you, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.
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根據納斯達克: CBRL的市盈率爲25.1倍,Cracker Barrel Old Country Store, Inc. (納斯達克: CBRL) 目前可能正發出消極信號,因爲美國有近一半公司的市盈率低於18倍,甚至低於10倍的不屬於飛凡。雖然,僅憑市盈率來判斷可能並不明智,因爲可能有解釋爲何市盈率會高至目前水平。
由於收益比市場近期更爲萎靡,Cracker Barrel Old Country Store 的表現非常疲軟。一個可能性是市盈率較高,因爲投資者認爲該公司將完全扭轉局勢,並超越市場上的大部分公司。如果不是這樣的話,那麼現有股東可能會對股價的可持續性感到非常緊張。
想了解分析師如何評價Cracker Barrel Old Country Store的未來?在這種情況下,我們的免費報告是一個很好的起點。
增長指標告訴我們關於高市盈率的什麼?
Cracker Barrel Old Country Store 的市盈率屬於預期實現穩健增長、並且更重要的是能夠勝過市場表現的公司典型水平。