"When you're dealing with stocks, the market discriminates and the punishment doesn't fit the crime," Jim Cramer said Wednesday on CNBC's "Mad Money." "It fits the offender."
Whereas a big, well-established slow-growth company reports a huge shortfall, its stock "might only get dinged," he said. But when a fast-growing momentum stock stumbles just slightly, investors better expect to see a merciless sell-off.
That's exactly what we saw happen to Buffalo Wild Wings, Cramer said. After reporting lackluster quarterly numbers, the Minneapolis, Minn.-based restaurant and sports bar chain took a huge hit, falling more than $8, or just under 11 percent. The firm's revenues were in line with analyst estimates, up 29.7 percent year-over-year, but the company reported earnings that were 6 cents shy of Wall Street's 68-cent consensus.
Cramer noted that Buffalo Wild Wings' same-store sales also missed expectations, though they did better than the broader casual dining category. Management cut full-year guidance from over 20 percent growth down to a range of 15 to 20 percent.
Before today, the stock was up almost 17 percent year-to-date, but BWLD gave up most of its gains for the year after issuing the report. Now, Cramer said the company's still expanding both domestically and abroad and raising its prices to pass the cost of higher chicken wings off to the consumer. Shares of BWLD now trade at just 18 times earnings, he said.
So, could Buffalo Wild Wings possibly be a bargain now that shares have come down as much as they have?
To find out, Cramer checked in with Sally Smith, president and CEO of Buffalo Wild Wings, on Wednesday's program.
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