Cracker Barrel: Is It an Undervalued Bargain or Overpriced Risk?

Cracker Barrel (NASDAQ:CBRL) has long been a recognizable name in American dining, but its stock hasn’t delivered the same sense of comfort as its menu. After several years of struggles, as evidenced by its multi-year decline since April 2021, investors are now asking a key question: is CBRL undervalued compared to its peers, or is the stock still priced for more than it’s worth?

When you line up Cracker Barrel (CBRL) against its restaurant peers—The Wendy’s (NASDAQ:WEN), Brinker International (NYSE:EAT), and CAVA Group (NYSE:CAVA)—you get a valuation picture that is anything but straightforward. On the surface, certain multiples suggest CBRL is a bargain. But once you dig into the metrics that matter most, the story shifts, and Cracker Barrel looks less like a value play and more like a stock still waiting for a turnaround.

Earnings & Cash Flow Multiples Signal Premium Pricing

When evaluating Cracker Barrel’s valuation, it makes sense to begin with the metrics that carry the most weight for institutional investors: P/E and EV/EBITDA.

On the earnings front, CBRL trades at a P/E of 19.7x, about a 5% premium to the peer median of 18.8x. That premium is modest, but it’s meaningful given the context. Wendy’s and Brinker generate steadier earnings streams through asset-light, franchise-heavy models, while CAVA commands a growth premium.

Cracker Barrel, by contrast, has faced margin compression from rising labor and food costs and sluggish traffic growth. For value-focused investors, this premium suggests the market may be pricing in a near-term rebound in profitability that has yet to materialize.

Turning to EV/EBITDA, often considered a cleaner measure of operating cash flow, CBRL trades at 11.0x, nearly identical to the peer median of 12.0x. This close alignment suggests that the market views Cracker Barrel’s current cash-generating capacity as broadly comparable to peers like Wendy’s and Brinker, despite their more asset-light, higher-margin structures.

In practice, this means investors are not assigning CBRL a discount for its heavier operating model, but they’re also not rewarding it with a premium. Instead, the stock is priced as if its restaurant-level cash flows will remain steady but unremarkable, reinforcing the view that it is fairly valued rather than a bargain.

Taken together, these two core multiples suggest that Cracker Barrel is fairly valued to modestly expensive on earnings and cash flow. It doesn’t look grossly overpriced, but it’s far from a deep value opportunity.

Sales- and Book-Based Ratios Tell a Different Story

Shifting the focus to price-to-sales and price-to-book multiples tells a very different story. CBRL trades at just 0.33x sales, well below the peer median of 1.34x, and at 2.4x book value, compared with a lofty 17.0x peer median. On the surface, those gaps suggest that Cracker Barrel is trading at deep value levels and might represent an overlooked opportunity.

A closer look, however, shows that this apparent cheapness is more structural than mispriced. Wendy’s and Brinker benefit from franchised, asset-light business models that generate higher margins and command richer multiples. CAVA, meanwhile, carries a growth premium thanks to its rapid store expansion and investor appetite for scalable fast-casual concepts.

Cracker Barrel, by contrast, owns and operates the majority of its stores, tying up more capital in real estate and operations. This asset-heavy model compresses both margins and return on equity, which naturally pulls down its P/S and P/B ratios.

In other words, while the sales and book multiples make CBRL appear undervalued on paper, they primarily reflect differences in business models rather than a clear market oversight.

What Would It Take for CBRL to Look Truly Undervalued?

For Cracker Barrel to trade at a genuine discount relative to its peers, the company would first need to strengthen its earnings power. To bring its P/E down in line with the peer median of 18.8x, CBRL’s earnings would need to grow by roughly 5%. On the EV/EBITDA front, the hurdle is much lower; it needs less than a 1% EBITDA boost to match the median.

The catch, however, is that even these modest improvements require real margin recovery. Without clear signs of cost relief, operational efficiencies, or stronger revenue leverage, it’s difficult to make the case that CBRL should re-rate higher on fundamentals alone. Put differently, the path to looking truly undervalued is less about headline multiples and more about the company’s ability to deliver sustained profitability improvements.  

Peer Comparison Verdict

When compared to WEN, EAT, and CAVA, Cracker Barrel looks cheap on sales and book but fairly valued to slightly expensive on earnings and cash flow. This split makes the valuation case less straightforward and more difficult to classify as genuine value.

On a relative basis, CBRL may screen cheaper than CAVA, but the two reflect different profiles. CAVA’s growth-stage, fast-casual model commands a premium multiple, while CBRL’s more mature, asset-intensive concept is priced on steadier cash flows. For a like-for-like read, WEN and EAT are closer operational comps, and CBRL does not appear discounted against them on the investor-relevant core metrics.

Ultimately, the “value case” for Cracker Barrel depends less on where its multiples sit today and more on whether management can engineer a sustained earnings recovery. Only then will CBRL have a shot at re-rating as a genuine value opportunity.

The Bottom Line

At first glance, Cracker Barrel’s stock may entice investors with its low sales and book ratios. Yet these figures reflect the company’s asset-heavy, lower-margin structure rather than genuine undervaluation. When the focus shifts to the measures that matter most (earnings and operating cash flow), the picture changes. On these metrics, CBRL is fairly valued at best and modestly overvalued at worst.

That means the investment case rests squarely on what happens next. Without a credible path to margin recovery and stronger earnings, Cracker Barrel does not meet the classic definition of a value stock. Instead, it’s better viewed as a turnaround story still in progress, with investors waiting to see whether management can deliver sustained profitability.