Cracker Barrel Old Country Store (CBRL) should be familiar to any traveler, as many of its restaurants can be found not far from a highway. In fact, that’s exactly why Dan Evins founded the company in the first place 45 years ago – to provide travelers a place to pull over, relax and enjoy a good meal at a fair price. Today, CBRL operates nearly 650 stores in 44 states, serving 57 million pancakes and 200 million biscuits to 217 million customers each year.

CBRL has a strong and simple brand, but I like that management is keeping up with the times and looking to add technology to the restaurant experience. I expect this will play a role in its continued growth. The company has consistently grown its earnings and beat the Street all but once over the last three years, and I anticipate that trend will continue in the years to come. In fact, analysts are looking for a 7.5% bottom-line increase this year and 5.5% growth in 2019.

Earnings Are a Near-Term Glitch

Speaking of earnings, CBRL got hit after its last report on February 20. The numbers were solid, though, and I suspect the selling was overdone with broader market weakness and Walmart’s (WMT) earnings hurting some consumer-related names.

Earnings of $2.73 per share were nicely ahead of the Street at $2.42, and revenue of $787.8 million was a slight beat. Some of the other numbers were a little mixed. For example, comparable restaurant sales grew by 1.1% and the average check was 2% higher, but traffic fell nearly 1%. Expenses pressured margins a bit with both higher food prices as well as costs related to the company’s initiatives.

I like that management’s guidance for full-year earnings of $9.30-$9.50 a share was ahead of estimates for $9.07. Revenue guidance is similar to before at $3.1 billion. Comparable restaurant sales are expected to grow 1%-2%, while retail sales are expected to be flat. Those were a bit disappointing, and they pressured the stock, but I think there is room for upside and that Cracker Barrel will benefit as Americans spend more money dining out.

This stock bounced around a bit in 2017, but it rallied into the end of the year after putting in a low in September. It came on very strong in the New Year and traded up to new highs just under $180, but since then CBRL has gotten caught up in the broad market weakness – much like almost every other stock.

The post-earnings selling pushed it below its 50-day moving average (the blue line), and after briefly finding some support at its 200-day average (the red line) the stock has recently dipped below it in the more recent broad weakness.

I’m not actively buying at current prices because I’d like to see the dust settle first, but over the long term I am a very big fan of this company. The stock is trading at a reasonable 16X future earnings, and it also pays out a solid dividend that currently yields 3%. Over time, I look for CBRL to climb to $220 if not higher.