William Blair analyst Sharon Zackfia has reiterated their bullish stance on CAKE stock, giving a Buy rating on July 16.
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Sharon Zackfia has given her Buy rating due to a combination of factors, primarily driven by The Cheesecake Factory’s impressive second-quarter performance. The company’s adjusted earnings per share surpassed both the implied guidance and consensus estimates, largely due to better-than-expected sales growth and improved restaurant-level margins. Additionally, the company benefited from lower-than-anticipated general and administrative as well as preopening expenses.
Moreover, while revenue from The Cheesecake Factory and North Italia slightly exceeded expectations, the significant revenue boost came from FRC and Flower Child. The Cheesecake Factory’s comparable sales increased by 1.2%, aligning with consensus, and showed improving trends throughout the quarter. This translated to annualized average unit volumes of nearly $12.8 million, setting a record for average weekly sales. Furthermore, the company saw improvements in labor retention and net promoter scores across key areas, contributing to the positive outlook.
In another report released on July 16, Citi also maintained a Buy rating on the stock with a $74.00 price target.
Based on the recent corporate insider activity of 38 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CAKE in relation to earlier this year.