What Happened?
Shares of restaurant company Cracker Barrel (NASDAQ:CBRL) fell 5.5% in the afternoon session after the company announced a private offering of $275 million in convertible senior notes (debt) due 2030. The stock is likely down due to concerns about the dilutive effect of the notes, which can be converted to the company's ordinary stock, raising the total share count.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Cracker Barrel? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Cracker Barrel’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock gained 10.6% on the news that the company reported strong preliminary first-quarter results for fiscal 2025, which beat Wall Street's revenue, adjusted EBITDA and EPS estimates.
Management commented positively, adding, "We are pleased that our comparable store sales and traffic results outperformed the Casual Dining industry."
The company also reaffirmed full-year sales and EBITDA forecast, which is encouraging.
Cracker Barrel is up 5% since the beginning of the year, but at $57.53 per share, it is still trading 11.5% below its 52-week high of $64.98 from January 2025. Investors who bought $1,000 worth of Cracker Barrel’s shares 5 years ago would now be looking at an investment worth $482.40.
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