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Cheesecake Factory (CAKE)
:CAKE
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Cheesecake Factory
(NASDAQ:CAKE)74Outperform
Positive Factors
Expansion Plans
The company plans to expand its store count, with a development outlook showing attractive growth potential.
Financial Performance
Cheesecake Factory had a stronger than expected same-store sales growth, beating consensus estimates, indicating positive momentum.
Negative Factors
Market Competition
Risks include intense competition in a contracting casual dining market, inflationary labor cost pressures, and the margin impact associated with third-party delivery providers.
Cheesecake Factory (CAKE) vs. S&P 500 (SPY)
Market Cap
$2.54B
Dividend Yield2.2%
Average Volume (3M)1.78M
Price to Earnings (P/E)15.4
Beta (1Y)0.87
Revenue Growth4.13%
EPS Growth56.76%
CountryUS
Employees47,900
SectorConsumer Cyclical
Sector Strength53
IndustryRestaurants & Bars
Share Statistics
EPS (TTM)3.20
Shares Outstanding51,643,044
10 Day Avg. Volume2,388,263
30 Day Avg. Volume1,782,110
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)N/A
Price to Sales (P/S)0.72
Price to Cash Flow (P/CF)8.00
P/FCF Ratio24.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$56.20Price Target Upside14.32% Upside
Rating ConsensusHold
Number of Analyst Covering16
Cheesecake Factory Business Overview & Revenue Model
Company DescriptionThe Cheesecake Factory Incorporated (NASDAQ: CAKE) is a renowned American restaurant company and distributor of cheesecakes based in the United States. Founded in 1972, the company operates upscale casual dining restaurants under The Cheesecake Factory brand as well as other brands like North Italia and a collection of restaurants within the Fox Restaurant Concepts subsidiary. Known for its extensive and eclectic menu, The Cheesecake Factory offers a wide variety of items, including appetizers, seafood, steaks, chicken, burgers, small plates, and a diverse selection of cheesecakes and desserts, catering to a broad demographic of diners.
How the Company Makes MoneyThe Cheesecake Factory primarily generates revenue through its restaurant operations, which include the sale of food and beverages at its numerous restaurant locations both domestically and internationally. A significant portion of its earnings comes from its flagship brand, The Cheesecake Factory, which attracts a large customer base due to its extensive menu and renowned cheesecake offerings. The company also derives income from its other dining brands, such as North Italia and restaurants under the Fox Restaurant Concepts umbrella. In addition to in-restaurant dining, The Cheesecake Factory benefits from takeout and delivery services, which have become increasingly important revenue streams, especially in response to changing consumer preferences and market dynamics. Furthermore, the company earns royalties and licensing fees from its bakery division, which produces cheesecakes and other baked goods for third-party foodservice operators, retailers, and distributors. Partnerships with international licensees further contribute to its revenue, allowing the brand to expand its global footprint and capitalize on international market opportunities.
Cheesecake Factory Financial Statement Overview
Summary
The Cheesecake Factory demonstrates strong financial health with consistent revenue and profit growth, as well as solid cash flow performance. Despite high leverage, effective cash flow management and profitability mitigate this concern.Income Statement
The Cheesecake Factory has shown a consistent revenue growth trend over recent years, with a notable 7.2% increase from 2023 to 2024. The gross profit margin remains strong and stable, indicating efficient management of cost of goods sold. Net profit margin has improved, reaching 4.38% in 2024, reflecting effective cost control and operational efficiency. The EBIT and EBITDA margins have also shown positive trends, enhancing profitability. Overall, the company demonstrates solid growth and profitability in its income statement metrics.78
Positive
Balance Sheet
The company maintains a high level of debt, with a debt-to-equity ratio of 4.30 in 2024, indicating significant leverage. However, the return on equity has improved to 35.37%, showing effective use of equity to generate profits. The equity ratio is relatively low at 14.58%, suggesting reliance on debt financing. Overall, while the company is profitable, the high leverage poses a risk that requires careful management.65
Positive
Cash Flow
Operating cash flow has consistently improved, reaching $268 million in 2024, supporting robust free cash flow growth. The free cash flow to net income ratio stands at 0.69, indicating strong cash conversion from earnings. Despite capital expenditures, the company maintains a positive free cash flow, providing flexibility for debt repayment and investment opportunities. The cash flow metrics reflect strong liquidity and a healthy cash position.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Mar 2024 | Mar 2023 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.58B | 3.44B | 3.30B | 2.93B | 1.98B | Gross Profit |
| 2.78B | 1.41B | 1.28B | 1.20B | 746.31M | EBIT |
| 178.32M | 108.57M | 83.69M | 119.97M | 88.88M | EBITDA |
| 282.60M | 202.90M | 174.47M | 208.52M | -255.92M | Net Income Common Stockholders |
| 156.78M | 101.35M | 43.12M | 72.37M | -253.37M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 84.18M | 56.29M | 114.78M | 189.63M | 154.09M | Total Assets |
| 3.04B | 2.84B | 2.78B | 2.80B | 2.75B | Total Debt |
| 1.91B | 1.86B | 1.84B | 1.82B | 1.64B | Net Debt |
| 1.82B | 1.80B | 1.73B | 1.63B | 1.48B | Total Liabilities |
| 2.60B | 2.52B | 2.48B | 2.47B | 2.24B | Stockholders Equity |
| 443.45M | 318.06M | 292.00M | 330.17M | 506.94M |
| Cash Flow | Free Cash Flow | |||
| 107.96M | 65.18M | 48.78M | 145.46M | -48.01M | Operating Cash Flow |
| 268.32M | 218.40M | 161.93M | 213.01M | 2.91M | Investing Cash Flow |
| -161.10M | -153.50M | -112.81M | -68.61M | -50.91M | Financing Cash Flow |
| -78.79M | -123.53M | -123.64M | -108.83M | 143.69M |
Cheesecake Factory Technical Analysis
Neutral
49.16
Price Trends
51.40
Negative
48.85
Positive
43.39
Positive
Market Momentum
-0.67
Positive
39.56
Neutral
10.24
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAKE, the sentiment is Neutral. The current price of 49.16 is below the 20-day moving average (MA) of 52.44, below the 50-day MA of 51.40, and above the 200-day MA of 43.39, indicating a neutral trend. The MACD of -0.67 indicates Positive momentum. The RSI at 39.56 is Neutral, neither overbought nor oversold. The STOCH value of 10.24 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CAKE.
Cheesecake Factory Risk Analysis
Cheesecake Factory disclosed 42 risk factors in its most recent earnings report. Cheesecake Factory reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cheesecake Factory Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $22.53B | 22.05 | 50.93% | 2.87% | 5.14% | 5.30% | |
74 Outperform | $2.54B | 15.36 | 41.18% | 2.20% | 4.13% | 56.76% | |
73 Outperform | $813.99M | 52.70 | 4.54% | ― | 1.81% | -15.53% | |
73 Outperform | $6.28B | 24.55 | 2390.91% | ― | 13.67% | 69.41% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
56 Neutral | $398.58M | 6.20 | -42.81% | 7.81% | -2.27% | 24.95% | |
41 Neutral | $80.70M | ― | 92.02% | ― | -4.19% | -266.52% |
* Consumer Cyclical Sector Average
Performance Comparison
CAKE
Cheesecake Factory
49.16
13.76
38.87%
BJRI
BJ's Restaurants
35.93
-0.07
-0.19%
EAT
Brinker International
141.37
93.33
194.28%
DRI
Darden Restaurants
194.67
28.75
17.33%
DIN
Dine Brands Global
26.13
-19.62
-42.89%
RRGB
Red Robin Gourmet
4.52
-2.57
-36.25%
Cheesecake Factory Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -8.96% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive sentiment with The Cheesecake Factory achieving record financial results, strong restaurant openings, and impressive sales growth in Flower Child. However, some challenges were noted in terms of mix and traffic, and weather-related impacts on Q1 2025 revenue were highlighted.Highlights
Record High Annual Revenues and Adjusted Earnings
In 2024, The Cheesecake Factory generated record high annual revenues and adjusted earnings per share, while also opening more new restaurants in a single year than ever before in the company's history.
Strong Restaurant Openings and Development Momentum
The company opened 9 restaurants in the fourth quarter and plans to open up to 25 new restaurants in 2025, including international expansions under licensing agreements.
High Cheesecake Factory Restaurant Level Margins
Cheesecake Factory restaurant level margins reached 18.4% in the fourth quarter, marking the highest level in over 7 years.
Flower Child Comparable Sales Surge
Flower Child comparable sales increased by 11% in the fourth quarter, significantly outpacing the Black Box fast casual dining index, resulting in average weekly sales of $83,000, up 10% from the fourth quarter of 2023.
Strong Fourth Quarter Financial Performance
Fourth quarter total revenues of $921 million and adjusted net income margin of 5.6% exceeded the high end of the guidance provided.
Lowlights
Challenges in Mix and Traffic
Cheesecake Factory experienced a negative mix impact of around 2%, primarily due to a decline in alcohol sales and a slight negative traffic of 0.4%.
Weather-Related Revenue Impact
The company anticipates an estimated impact of approximately $7 million in sales in Q1 2025 due to inclement weather experienced so far in the quarter.
Company Guidance
In the fourth quarter of fiscal 2024, The Cheesecake Factory exceeded its guidance, achieving record high annual revenues and adjusted earnings per share. The company opened 9 new restaurants during the quarter, which included 2 Cheesecake Factories, 3 North Italia, 2 Flower Child, and 2 FRC restaurants, with plans to open up to 25 new restaurants in 2025. The Cheesecake Factory's restaurant-level margins reached 18.4%, the highest in over seven years, with comparable sales increasing by 1.7% and traffic outperforming the industry by 110 basis points. For the full fiscal year, total revenues were $3.58 billion, with an adjusted earnings per share of $3.44, marking a 28% year-over-year increase. Looking ahead to 2025, the company anticipates total revenues to be approximately $3.8 billion, with the expectation of opening as many as 25 new restaurants domestically and 2 internationally under licensing agreements.Cheesecake Factory Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
Cheesecake Factory Reports Strong Q4 2024 Performance
Positive
Feb 19, 2025
On February 19, 2025, The Cheesecake Factory reported a strong financial performance for the fourth quarter of fiscal 2024, with total revenues reaching $921.0 million, up from $877.0 million the previous year. The company’s net income was $41.2 million, and it achieved significant growth in comparable restaurant sales, which increased by 1.7% year-over-year. The company opened nine new restaurants in the fourth quarter, contributing to a total of 23 new openings in 2024, and plans to open up to 25 new locations in 2025. The Board declared a quarterly cash dividend of $0.27 per share, reflecting the company’s confidence in its operational strengths and long-term growth potential.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.