Value
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.6 |
| P/S | 10.0 |
| EV/EBITDA | 0.6 |
| Fwd P/E | 2.1 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 54.4x
- ▸PEG: 0.23
CBRL · Why this verdict
Why Cracker Barrel Old Country Stor (CBRL) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Cracker Barrel shows a technical breakout but the engine's own quality, value-trap, and risk/reward signals all point to caution -- an earnings-quality red flag, margin compression, negative asymmetry, and elevated short interest outweigh the cheap headline valuation.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The engine flags an earnings quality red flag, with free cash flow running at -14% of net income, no competitive moat, and broader quality concerns that keep the quality score at just 1.6, far below the 4.0 floor. Quality breakdown | The FCF-to-net-income ratio should turn positive and quality score should climb above 3.0 over the next 12 months if fundamentals are stabilizing. | →Stable |
| CounterA negative FCF/NI ratio in a single period can reflect timing of working-capital swings or one-time capital expenditures rather than a persistent earnings-quality problem. | ||
The engine flags 2 of 5 value-trap signals -- operating margin has compressed to 2.6% and insiders made 5 sells worth 0.04% of market cap -- suggesting the cheap-looking valuation may be a trap rather than a bargain. Bear case | Operating margin should recover above 5% over the next 4 quarters to disprove the value-trap read. | →Stable |
| CounterRestaurant chains routinely see temporary margin compression from input-cost inflation or remodel capex that reverses once the cycle turns, without reflecting a structural value trap. | ||
The engine's risk/reward asymmetry ratio sits deeply negative at -2.38, with the analyst target already reached and 35.8% below the original upside case, meaning downside risk now dominates the setup. Engine gate (failed) | The asymmetry ratio should turn positive (above 0) over the next few months if the setup improves. | →Stable |
| CounterA negative asymmetry reading right after a strong technical breakout can just reflect near-term target exhaustion rather than a durable reversal, since price already cleared its prior resistance. | ||
Short interest sits elevated at 45% of float, a level the engine flags as a key risk even as the stock holds a technical breakout above its 200-day moving average. Key risks | Short interest should decline below 30% over the next 2 quarters if bearish conviction is fading. | →Stable |
| CounterVery high short interest can also set up a short squeeze that pushes the stock sharply higher if any positive catalyst emerges, which would look bullish rather than risky. | ||
The engine flags an earnings quality red flag, with free cash flow running at -14% of net income, no competitive moat, and broader quality concerns that keep the quality score at just 1.6, far below the 4.0 floor.
→StableQuality breakdown
- Expectation
- The FCF-to-net-income ratio should turn positive and quality score should climb above 3.0 over the next 12 months if fundamentals are stabilizing.
CounterA negative FCF/NI ratio in a single period can reflect timing of working-capital swings or one-time capital expenditures rather than a persistent earnings-quality problem.
The engine flags 2 of 5 value-trap signals -- operating margin has compressed to 2.6% and insiders made 5 sells worth 0.04% of market cap -- suggesting the cheap-looking valuation may be a trap rather than a bargain.
→StableBear case
- Expectation
- Operating margin should recover above 5% over the next 4 quarters to disprove the value-trap read.
CounterRestaurant chains routinely see temporary margin compression from input-cost inflation or remodel capex that reverses once the cycle turns, without reflecting a structural value trap.
The engine's risk/reward asymmetry ratio sits deeply negative at -2.38, with the analyst target already reached and 35.8% below the original upside case, meaning downside risk now dominates the setup.
→StableEngine gate (failed)
- Expectation
- The asymmetry ratio should turn positive (above 0) over the next few months if the setup improves.
CounterA negative asymmetry reading right after a strong technical breakout can just reflect near-term target exhaustion rather than a durable reversal, since price already cleared its prior resistance.
Short interest sits elevated at 45% of float, a level the engine flags as a key risk even as the stock holds a technical breakout above its 200-day moving average.
→StableKey risks
- Expectation
- Short interest should decline below 30% over the next 2 quarters if bearish conviction is fading.
CounterVery high short interest can also set up a short squeeze that pushes the stock sharply higher if any positive catalyst emerges, which would look bullish rather than risky.
Per-dimension breakdown
Quality
1.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.9 |
| ROA | 0.0 |
| Gross margin | 2.3 |
| Op margin | 0.3 |
| Net margin | 0.4 |
| Current ratio | 2.0 |
| FCF quality | 0.0 |
| Moat | 3.1 |
| Piotroski F | 4.4 |
- ▸Earnings quality RED FLAG: -14% FCF/NI
- ▸No competitive moat
- ▸Quality concerns
Growth
5.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.8 |
| EPS growth | 10.0 |
- ▸Declining revenue: -3%
Momentum
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.4 |
| Analyst rating | 5.0 |
| Price target | 3.0 |
- ▸Below analyst target
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
2.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.4 |
| quality rank | 1.9 |
| growth rank | 0.6 |
Technical
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.7 |
| support resistance | 5.1 |
| 52w position | 4.6 |
| gap | 6.0 |
Risk (lower is worse)
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.0 |
| days to cover | 7.3 |
| volatility | 0.0 |
| put call | 7.5 |
| implied vol | 3.3 |
| max pain risk | 3.0 |
| beta | 6.2 |
| debt equity | 2.5 |
- ▸High short interest: 45%
- ▸High IV: 60%
- ▸Above max pain $25
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 2.0 |
| news activity | 8.0 |
- ▸Earnings concerns: 2B/2M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (5)
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.70
- EARNINGS_PROXIMITY:55d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.5<4.5
- ASYMMETRY:-2.4=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-2.42
Upside
-25.1%
Downside
10.4%
Sizing output
AVOID
SetupRange Bound — RSI 44 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $1.2B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 2.5<4.5 outcome against Insider at 7.3 and asymmetric R:R of -2.42.
The strongest dimensions are Insider at 7.3, Growth at 5.9, and Catalyst at 5.8; the weakest are Quality at 1.6, Momentum at 2.5, and Peer rank at 2.6. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -2.42 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Quality Red Flag
Trip ifQuality score rises above 4.0.
- P2Value Trap Margin Compression
Trip ifOperating margin stays below 3% for 2 more consecutive quarters.
- P3Negative Asymmetry Risk Reward
Trip ifAsymmetry ratio stays below -1.0 for 2 more consecutive months.
- P4High Short Interest Pressure
Trip ifShort interest exceeds 50% of float.