Intrinsic value of Cracker Barrel Old Country Store, Inc. - CBRL

Previous Close

$168.32

  Intrinsic Value

$185.65

stock screener

  Rating & Target

hold

+10%

Previous close

$168.32

 
Intrinsic value

$185.65

 
Up/down potential

+10%

 
Rating

hold

We calculate the intrinsic value of CBRL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 4.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  3.00
  3.20
  3.38
  3.54
  3.69
  3.82
  3.94
  4.04
  4.14
  4.23
  4.30
  4.37
  4.44
  4.49
  4.54
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.90
  4.91
Revenue, $m
  3,121
  3,221
  3,330
  3,448
  3,575
  3,711
  3,857
  4,013
  4,179
  4,356
  4,543
  4,742
  4,952
  5,175
  5,410
  5,658
  5,920
  6,196
  6,488
  6,794
  7,118
  7,458
  7,816
  8,193
  8,590
  9,007
  9,445
  9,907
  10,392
  10,902
Variable operating expenses, $m
  2,784
  2,869
  2,962
  3,063
  3,172
  3,288
  3,413
  3,547
  3,689
  3,840
  3,885
  4,055
  4,235
  4,425
  4,626
  4,838
  5,062
  5,298
  5,547
  5,810
  6,086
  6,377
  6,683
  7,006
  7,345
  7,702
  8,077
  8,471
  8,886
  9,322
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,784
  2,869
  2,962
  3,063
  3,172
  3,288
  3,413
  3,547
  3,689
  3,840
  3,885
  4,055
  4,235
  4,425
  4,626
  4,838
  5,062
  5,298
  5,547
  5,810
  6,086
  6,377
  6,683
  7,006
  7,345
  7,702
  8,077
  8,471
  8,886
  9,322
Operating income, $m
  337
  352
  368
  385
  403
  423
  444
  467
  491
  516
  658
  687
  718
  750
  784
  820
  858
  898
  940
  985
  1,031
  1,081
  1,133
  1,187
  1,245
  1,305
  1,369
  1,436
  1,506
  1,580
EBITDA, $m
  549
  566
  585
  606
  629
  653
  678
  706
  735
  766
  799
  834
  871
  910
  951
  995
  1,041
  1,090
  1,141
  1,195
  1,252
  1,311
  1,374
  1,441
  1,510
  1,584
  1,661
  1,742
  1,827
  1,917
Interest expense (income), $m
  13
  22
  23
  25
  27
  29
  31
  33
  36
  38
  41
  44
  47
  50
  54
  58
  62
  66
  70
  75
  80
  85
  90
  96
  102
  109
  115
  122
  130
  137
  146
Earnings before tax, $m
  316
  329
  343
  358
  375
  392
  411
  431
  453
  475
  615
  640
  667
  696
  726
  758
  792
  828
  865
  905
  946
  990
  1,037
  1,085
  1,136
  1,190
  1,247
  1,306
  1,369
  1,434
Tax expense, $m
  85
  89
  93
  97
  101
  106
  111
  116
  122
  128
  166
  173
  180
  188
  196
  205
  214
  223
  234
  244
  256
  267
  280
  293
  307
  321
  337
  353
  370
  387
Net income, $m
  231
  240
  250
  261
  273
  286
  300
  315
  330
  347
  449
  467
  487
  508
  530
  554
  578
  604
  632
  661
  691
  723
  757
  792
  829
  869
  910
  953
  999
  1,047

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,573
  1,623
  1,678
  1,738
  1,802
  1,871
  1,944
  2,023
  2,107
  2,196
  2,290
  2,390
  2,496
  2,608
  2,727
  2,852
  2,984
  3,123
  3,270
  3,425
  3,587
  3,759
  3,940
  4,130
  4,329
  4,540
  4,761
  4,993
  5,238
  5,495
Adjusted assets (=assets-cash), $m
  1,573
  1,623
  1,678
  1,738
  1,802
  1,871
  1,944
  2,023
  2,107
  2,196
  2,290
  2,390
  2,496
  2,608
  2,727
  2,852
  2,984
  3,123
  3,270
  3,425
  3,587
  3,759
  3,940
  4,130
  4,329
  4,540
  4,761
  4,993
  5,238
  5,495
Revenue / Adjusted assets
  1.984
  1.985
  1.985
  1.984
  1.984
  1.983
  1.984
  1.984
  1.983
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
  1.984
Average production assets, $m
  1,158
  1,195
  1,235
  1,279
  1,326
  1,377
  1,431
  1,489
  1,551
  1,616
  1,686
  1,759
  1,837
  1,920
  2,007
  2,099
  2,196
  2,299
  2,407
  2,521
  2,641
  2,767
  2,900
  3,040
  3,187
  3,342
  3,504
  3,675
  3,855
  4,044
Working capital, $m
  -178
  -184
  -190
  -197
  -204
  -212
  -220
  -229
  -238
  -248
  -259
  -270
  -282
  -295
  -308
  -323
  -337
  -353
  -370
  -387
  -406
  -425
  -446
  -467
  -490
  -513
  -538
  -565
  -592
  -621
Total debt, $m
  428
  459
  493
  530
  570
  612
  658
  707
  758
  813
  872
  934
  1,000
  1,069
  1,142
  1,220
  1,301
  1,388
  1,479
  1,574
  1,675
  1,781
  1,893
  2,011
  2,134
  2,265
  2,401
  2,545
  2,697
  2,856
Total liabilities, $m
  974
  1,005
  1,039
  1,076
  1,115
  1,158
  1,203
  1,252
  1,304
  1,359
  1,418
  1,480
  1,545
  1,615
  1,688
  1,765
  1,847
  1,933
  2,024
  2,120
  2,221
  2,327
  2,439
  2,556
  2,680
  2,810
  2,947
  3,091
  3,242
  3,401
Total equity, $m
  599
  619
  639
  662
  686
  713
  741
  771
  803
  837
  873
  911
  951
  994
  1,039
  1,087
  1,137
  1,190
  1,246
  1,305
  1,367
  1,432
  1,501
  1,573
  1,650
  1,730
  1,814
  1,902
  1,996
  2,093
Total liabilities and equity, $m
  1,573
  1,624
  1,678
  1,738
  1,801
  1,871
  1,944
  2,023
  2,107
  2,196
  2,291
  2,391
  2,496
  2,609
  2,727
  2,852
  2,984
  3,123
  3,270
  3,425
  3,588
  3,759
  3,940
  4,129
  4,330
  4,540
  4,761
  4,993
  5,238
  5,494
Debt-to-equity ratio
  0.710
  0.740
  0.770
  0.800
  0.830
  0.860
  0.890
  0.920
  0.940
  0.970
  1.000
  1.030
  1.050
  1.080
  1.100
  1.120
  1.140
  1.170
  1.190
  1.210
  1.230
  1.240
  1.260
  1.280
  1.290
  1.310
  1.320
  1.340
  1.350
  1.360
Adjusted equity ratio
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381
  0.381

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  231
  240
  250
  261
  273
  286
  300
  315
  330
  347
  449
  467
  487
  508
  530
  554
  578
  604
  632
  661
  691
  723
  757
  792
  829
  869
  910
  953
  999
  1,047
Depreciation, amort., depletion, $m
  211
  214
  218
  221
  225
  230
  234
  239
  244
  250
  140
  147
  153
  160
  167
  175
  183
  192
  201
  210
  220
  231
  242
  253
  266
  278
  292
  306
  321
  337
Funds from operations, $m
  442
  454
  468
  483
  499
  516
  534
  554
  575
  597
  589
  614
  640
  668
  697
  728
  761
  796
  832
  871
  911
  954
  998
  1,045
  1,095
  1,147
  1,202
  1,260
  1,320
  1,384
Change in working capital, $m
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -23
  -24
  -25
  -26
  -28
  -29
Cash from operations, $m
  447
  460
  474
  490
  506
  524
  543
  563
  584
  607
  600
  625
  652
  681
  711
  743
  776
  812
  849
  888
  929
  973
  1,019
  1,067
  1,118
  1,171
  1,227
  1,286
  1,348
  1,413
Maintenance CAPEX, $m
  -94
  -96
  -100
  -103
  -107
  -111
  -115
  -119
  -124
  -129
  -135
  -140
  -147
  -153
  -160
  -167
  -175
  -183
  -192
  -201
  -210
  -220
  -231
  -242
  -253
  -266
  -278
  -292
  -306
  -321
New CAPEX, $m
  -34
  -37
  -40
  -44
  -47
  -51
  -54
  -58
  -62
  -66
  -70
  -74
  -78
  -83
  -87
  -92
  -97
  -102
  -108
  -114
  -120
  -126
  -133
  -140
  -147
  -155
  -163
  -171
  -180
  -189
Cash from investing activities, $m
  -128
  -133
  -140
  -147
  -154
  -162
  -169
  -177
  -186
  -195
  -205
  -214
  -225
  -236
  -247
  -259
  -272
  -285
  -300
  -315
  -330
  -346
  -364
  -382
  -400
  -421
  -441
  -463
  -486
  -510
Free cash flow, $m
  319
  327
  334
  343
  352
  363
  374
  386
  398
  412
  396
  411
  428
  445
  464
  483
  504
  526
  549
  574
  599
  627
  655
  685
  717
  751
  786
  823
  862
  903
Issuance/(repayment) of debt, $m
  28
  31
  34
  37
  40
  43
  46
  49
  52
  55
  58
  62
  66
  69
  73
  77
  82
  86
  91
  96
  101
  106
  112
  118
  124
  130
  137
  144
  151
  159
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  28
  31
  34
  37
  40
  43
  46
  49
  52
  55
  58
  62
  66
  69
  73
  77
  82
  86
  91
  96
  101
  106
  112
  118
  124
  130
  137
  144
  151
  159
Total cash flow (excl. dividends), $m
  347
  358
  368
  380
  392
  405
  419
  434
  450
  467
  454
  473
  493
  514
  537
  561
  586
  612
  640
  669
  700
  733
  767
  803
  841
  881
  923
  967
  1,013
  1,062
Retained Cash Flow (-), $m
  -18
  -19
  -21
  -23
  -24
  -26
  -28
  -30
  -32
  -34
  -36
  -38
  -40
  -43
  -45
  -48
  -50
  -53
  -56
  -59
  -62
  -65
  -69
  -72
  -76
  -80
  -84
  -89
  -93
  -98
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  330
  339
  347
  357
  368
  379
  391
  404
  418
  433
  418
  435
  453
  472
  492
  513
  535
  559
  584
  610
  638
  667
  698
  731
  765
  801
  838
  878
  920
  964
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  316
  310
  302
  294
  285
  275
  264
  253
  240
  227
  199
  186
  172
  158
  144
  130
  117
  103
  90
  78
  66
  55
  46
  37
  30
  23
  18
  14
  10
  7
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Cracker Barrel Old Country Store, Inc. is engaged in the operation and development of the Cracker Barrel Old Country Store concept (Cracker Barrel). The Company's segments include Restaurant and Retail. As of September 19, 2016, the Company operated 640 Cracker Barrel stores in 43 states. The format of its stores consists of a rustic old country-store design offering a restaurant menu that features home-style country food and a range of decorative and functional items, such as rocking chairs, holiday and seasonal gifts and toys, apparel, cookware and foods. Its restaurants offer home-style country cooking featuring of its own recipes. Its restaurants serve breakfast, lunch and dinner. Its breakfast items include juices, eggs, pancakes, grits, and a range of biscuit specialties. Its lunch and dinner items include country ham, chicken and dumplings, chicken fried chicken, meatloaf, fresh side items and specialty items, such as pinto beans and turnip greens.

FINANCIAL RATIOS  of  Cracker Barrel Old Country Store, Inc. (CBRL)

Valuation Ratios
P/E Ratio 20
Price to Sales 1.4
Price to Book 7.4
Price to Tangible Book
Price to Cash Flow 12.6
Price to Free Cash Flow 19.3
Growth Rates
Sales Growth Rate 0.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -2.6%
Cap. Spend. - 3 Yr. Gr. Rate 3.8%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 73.4%
Total Debt to Equity 73.4%
Interest Coverage 24
Management Effectiveness
Return On Assets 14%
Ret/ On Assets - 3 Yr. Avg. 12.8%
Return On Total Capital 21.6%
Ret/ On T. Cap. - 3 Yr. Avg. 19.8%
Return On Equity 37.7%
Return On Equity - 3 Yr. Avg. 34.7%
Asset Turnover 1.9
Profitability Ratios
Gross Margin 69.5%
Gross Margin - 3 Yr. Avg. 68.4%
EBITDA Margin 13.6%
EBITDA Margin - 3 Yr. Avg. 12.4%
Operating Margin 10.7%
Oper. Margin - 3 Yr. Avg. 9.8%
Pre-Tax Margin 10.2%
Pre-Tax Margin - 3 Yr. Avg. 9.2%
Net Profit Margin 6.9%
Net Profit Margin - 3 Yr. Avg. 6.4%
Effective Tax Rate 32.4%
Eff/ Tax Rate - 3 Yr. Avg. 30.8%
Payout Ratio 97.5%

CBRL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CBRL stock intrinsic value calculation we used $3030 million for the last fiscal year's total revenue generated by Cracker Barrel Old Country Store, Inc.. The default revenue input number comes from 0001 income statement of Cracker Barrel Old Country Store, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CBRL stock valuation model: a) initial revenue growth rate of 3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for CBRL is calculated based on our internal credit rating of Cracker Barrel Old Country Store, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Cracker Barrel Old Country Store, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CBRL stock the variable cost ratio is equal to 89.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CBRL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Cracker Barrel Old Country Store, Inc..

Corporate tax rate of 27% is the nominal tax rate for Cracker Barrel Old Country Store, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CBRL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CBRL are equal to 37.1%.

Life of production assets of 12 years is the average useful life of capital assets used in Cracker Barrel Old Country Store, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CBRL is equal to -5.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $581.781 million for Cracker Barrel Old Country Store, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 24.047 million for Cracker Barrel Old Country Store, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Cracker Barrel Old Country Store, Inc. at the current share price and the inputted number of shares is $4.0 billion.

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