Is Cracker Barrel Old Country Store, Inc. overvalued or undervalued?

As of 6 March 2025, Cracker Barrel Old Country Store, Inc. has moved from a very attractive to a very expensive valuation grade. The company appears to be overvalued based on its current financial metrics. The P/E ratio stands at 20, while the industry average is approximately 21.87, indicating that the stock is trading at a premium compared to its peers. Additionally, the EV to EBITDA ratio is 8.72, which is lower than the peer average of 9.28, suggesting that while the company has a competitive edge in earnings before interest, taxes, depreciation, and amortization, its overall valuation remains high.
In comparison to its peers, Cracker Barrel's ROE is 13.09% and ROCE is 8.13%, which are respectable but do not justify the current valuation given the high P/E ratio. The company has also demonstrated a significant dividend yield of 135.18%, which may attract income-focused investors, yet this does not mitigate the overvaluation concern. Notably, the stock has outperformed the S&P 500 in the past year with a return of 34.61% compared to the index's 10.26%, but this performance may not be sustainable given the current valuation metrics.