EAT Plunges 20%, Should You Consider Buying The Dip?
Brinker International stock has fallen by 20.4% in less than a month, from $158.95 on 9/11/2025 to $126.52 now. Should you buy this dip? Dip buying is a viable strategy for quality stocks that have a history of recovering from dips.
As it turns out, Brinker International passes basic quality checks and has returned (median) 41% in one year, and 59% as peak return following sharp dips (>30% in 30 days) historically. For quick background, EAT operates and franchises casual dining restaurants, primarily Chili’s and Maggiano’s, with a global presence encompassing 1,648 locations as of mid-2021.
Price behaviour is one thing, but what do the fundamentals say? Read Buy or Sell EAT Stock to see the full picture.
EAT stock has fallen meaningfully recently and we currently find it risky. This may feel like a caution, and there is significant risk in relying on a single stock. However, there is a huge value to a broader diversified approach. Strategic asset allocation and diversification helps you stay invested. Did you know investors who panicked out of the S&P in 2020 lost significant upside that followed? Trefis High Quality Portfolio and Empirical Asset Management’s asset allocation approach are designed to reduce volatility so you can stay the course.
Historical Median Returns Post Dips
| Period | Past Median Return |
|---|---|
| 1M | -11.2% |
| 3M | 10.7% |
| 6M | 37.4% |
| 12M | 41.0% |
Historical Dip-Wise Details
EAT had 3 events since 1/1/2010 where the dip threshold of -30% within 30 days was triggered
- 59% median peak return within 1 year of dip event
- 238 days is the median time to peak return after a dip event
- -35% median max drawdown within 1 year of dip event
| 30 Day Dip | EAT Subsequent Performance | |||||||
|---|---|---|---|---|---|---|---|---|
| Date | EAT | SPY | 1Y | Peak Return |
Max Drop |
# Days to Peak |
||
| Median | 41% | 59% | -35% | 238 | ||||
| 6142022 | -33% | -10% | 41% | 59% | -15% | 238 | ||
| 12012021 | -31% | -0% | -1% | 29% | -35% | 77 | ||
| 3062020 | -32% | -10% | 139% | 145% | -75% | 353 | ||
Brinker International Passes Basic Financial Quality Checks
Revenue growth, profitability, cash flow, and balance sheet strength need to be evaluated to reduce the risk of a dip being the sign of a deteriorating business situation.
| Quality Metrics | Value | Quality Check |
|---|---|---|
| Revenue Growth (LTM) | 21.9% | Pass |
| Revenue Growth (3-Yr Avg) | 12.5% | Pass |
| Operating Cash Flow Margin (LTM) | 12.6% | Pass |
| Leverage (see below) | – | Pass |
| => Interest Coverage Ratio | 9.7 | |
| => Cash To Interest Expense Ratio | 0.4 |
Dip buying, while attractive, needs to be evaluated carefully from multiple angles. Such multi-factor analysis is exactly how we construct Trefis portfolio strategies. If you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.