When to Buy Cracker Barrel Old Country Store (CBRL): Timing the Momentum with Zacks' Bullish Signals

Cracker Barrel Old Country Store (CBRL) is currently riding a wave of momentum that aligns perfectly with bullish signals from Zacks Investment Research. Combining a #1 Zacks Rank (“Strong Buy”), an A Momentum Style Score, and accelerating earnings revisions, CBRL presents a compelling opportunity for investors seeking to capitalize on short-term gains while aligning with longer-term fundamentals. Here's how to time your entry.

Technical Momentum: A Stock on the Move

CBRL's price action over the past quarter underscores its momentum-driven appeal. Over the last week, shares surged 14.48%, outperforming the Zacks Retail-Restaurants industry by a staggering 14.45 percentage points (industry rose just 0.03%). This short-term spike aligns with its Zacks Momentum Style Score of A, a designation reserved for stocks demonstrating strong upward price trends.

Looking at broader time frames:
- Monthly performance: CBRL gained 5.13% vs. the industry's flat 5.25%, suggesting resilience in volatile markets.
- Quarterly performance: A 48.93% jump over three months highlights its fast-paced momentum.
- Annual performance: A 34.02% rise since June 2024 dwarfs the S&P 500's 5.61% gain, underscoring its outperformance.

The stock's beta of 1.45—indicating 45% more volatility than the market—supports its momentum profile. Investors should note the 20-day average trading volume of 1.18 million shares, signaling moderate liquidity and buyer interest.

Fundamental Momentum: Earnings Revisions and Strategic Gains

CBRL's technical strength is underpinned by improving fundamentals. The company's Zacks #1 Rank reflects upward revisions in earnings estimates, a key driver of its momentum. For fiscal 2025 (ending July), the consensus EPS has risen 7.8% to $3.08 over three months. Even more compelling:
- Earnings revisions: Over the past two months, analysts raised annual EPS estimates three times (no downward revisions), lifting the consensus from $2.82 to $3.10.
- Fiscal 2026 outlook: Three upward revisions in next-year estimates highlight sustained optimism.

Recent third-quarter results reinforced this narrative. CBRL reported $48.1 million in adjusted EBITDA, a 0.4% rise year-over-year, and upgraded its fiscal 2025 EBITDA guidance to $215–225 million, up from $210–220 million. Cost discipline—reducing commodity and wage inflation estimates—has bolstered margins, while comparable restaurant sales grew 1.0% (driven by 4.9% menu price hikes).

The company's P/S ratio of 0.38 suggests it trades at a discount to its sales performance, making it a “bargain” for momentum investors.

Convergence of Trends: When to Pull the Trigger

The confluence of CBRL's short-term volatility, long-term EPS growth, and Zacks' institutional credibility creates a clear entry point. Here's how to time it:

1. Leverage the Zacks #1 Rank's Historical Outperformance

Zacks' system shows that stocks with a #1 Rank and an A or B Momentum Score historically outperform the market by +1.3% on average over one month. With CBRL's A Momentum Score, the near-term upside is statistically favorable.

2. Target Support Levels with Limit Orders

Identify key support zones using technical analysis. For example:
- If CBRL dips to $55–$57, consider a limit order, as this area has held as support in recent months.
- Pair this with a stop-loss at $52, protecting against a sharp reversal.

3. Monitor Volume and Industry Comparisons

A sustained trading volume above 1.5 million shares could signal accelerating buying pressure. Meanwhile, continued outperformance versus the Retail-Restaurants industry (which remains stagnant) would validate the momentum thesis.

4. Ride the Earnings Momentum

The upward revisions in EPS and EBITDA suggest analysts are pricing in operational improvements. If CBRL surpasses its $215–225 million EBITDA guidance, it could trigger a rerating of the stock.

Risk Management: Protecting Gains in a Volatile Market

While CBRL's momentum is strong, no investment is risk-free. Pair any long position with:
- Stop-loss orders to limit downside.
- Trailing stops tied to recent lows (e.g., 10% below the entry price).
- Dollar-cost averaging if the stock shows signs of consolidation.

Conclusion: A Prime Moment for Momentum Investors

CBRL's combination of Zacks' top-ranked bullish signals, accelerating earnings revisions, and technical outperformance positions it as a standout momentum play. Investors who act now—using disciplined entry points and risk controls—can capture gains as the stock capitalizes on its operational turnaround and strong consumer demand. For those willing to ride the wave, CBRL offers a rare blend of near-term excitement and long-term potential.

Final note: Monitor CBRL's next earnings report and Zacks' updates for confirmation of sustained momentum.