Cheesecake Factory (CAKE) AI Stock Analysis

• Market Cap: $3.14B
• Dividend Yield: 2.11%
• Average Volume (3M): 1.38M
• Price to Earnings (P/E): 15.7
• Beta (1Y): 0.90
• Revenue Growth: 4.90%
• EPS Growth: 27.14%
• Country: US
• Employees: 47,900
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 1.00
• Shares Outstanding: 49,859,093
• 10 Day Avg. Volume: 1,694,929
• 30 Day Avg. Volume: 1,382,347
• PEG Ratio: -4.68
• Price to Book (P/B): 5.34
• Price to Sales (P/S): 0.62
• P/FCF Ratio: 15.03
• Enterprise Value/Market Cap: 2.03
• Enterprise Value/Revenue: 1.70
• Enterprise Value/Gross Profit: 2.17
• Enterprise Value/Ebitda: 23.00
• 1Y Price Target: $62.69
• Price Target Upside: -0.48% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 15
• EPS Forecast (FY): 4.03
• Revenue Forecast (FY): $3.91B

• Rating: 69 Neutral
• Price Target: $70.00 ▲(11.13% Upside)
• Action: Reiterated Date: 02/24/26
• Date: Action: Reiterated 02/24/26

The score is driven primarily by improving fundamentals with meaningful cash generation but continued leverage and thin/mixed margins. Technicals are supportive with clear trend strength above major moving averages. Valuation is reasonable but not cheap, and earnings-call positives (record results, growth plan) are tempered by comp-sales pressure, mix headwinds, and the near-term debt maturity.

Positive Factors

Strong cash generation and free cash flow

Sustained operating cash flow (~$301M) and positive free cash flow (~$155M) provide durable internal funding for unit growth, dividends and buybacks. Solid cash generation supports reinvestment and gradual deleveraging capacity even in a cyclical dining environment.

Multi‑brand portfolio with high unit economics

A diversified concept set (Cheesecake Factory, North Italia, Flower Child, FRC) with strong AUVs and outperformance at newer concepts reduces single‑brand concentration risk. High unit economics underpin scalable development and make expansion a durable driver of revenue and margin improvement.

Healthy liquidity and disciplined capital returns

Substantial available liquidity (~$582M) alongside increased buyback authorization and a raised dividend signals management confidence and capital discipline. This balance of shareholder returns and retained liquidity supports long‑term value creation while preserving operational flexibility.

Negative Factors

Elevated leverage with near‑term maturity risk

Debt remains high relative to equity (~1.4x), and a near‑term convertible note maturity increases refinancing risk. For a cyclical restaurant operator, elevated leverage constrains flexibility for expansion or absorbent shocks, making cash generation and refinancing execution critical over coming quarters.

Core brand comp‑sales weakness and negative mix

Sequential comparable‑sales declines at the core Cheesecake Factory and a shift toward lower‑priced menu items reduce average checks and can depress margins. If traffic and mix improvements don't persist, core profitability and the ability to fund growth from mature stores will be challenged longer term.

Thin margins and modest FCF conversion

Restaurant‑level margins remain mid‑single digits and corporate net margin is thin (~4%). Free cash flow conversion is moderate (FCF ~50% of net income), limiting rapid deleveraging or heavy reinvestment without external funding, and making margins vulnerable to sustained cost inflation.

Cheesecake Factory Business Overview & Revenue Model

Company Description

The Cheesecake Factory Incorporated operates restaurants. It operates two bakeries that produces cheesecakes and other baked products for its restaurants, international licensees, third-party bakery customers, external foodservice operators, retailers, and distributors. The company owns and operates 306 restaurants throughout the United States and Canada under brands, including 208 The Cheesecake Factory and 29 North Italia; and a collection of Fox Restaurant Concepts, as well as 29 The Cheesecake Factory restaurants under licensing agreements internationally. The Cheesecake Factory Incorporated was founded in 1972 and is headquartered in Calabasas, California.

How the Company Makes Money

The Cheesecake Factory generates revenue primarily through its restaurant operations, which include dine-in, takeout, and delivery services. The company earns money from customers who visit its locations and order food and beverages, with a significant focus on its signature cheesecakes and desserts, which are high-margin items. Additionally, the company's bakery division contributes to its revenue by supplying cakes and desserts to various retail outlets. Key revenue streams include food sales, beverage sales, and a growing segment of off-premise dining options. The Cheesecake Factory also benefits from its loyalty program and partnerships with delivery services, which help increase customer engagement and drive sales. Seasonal promotions and limited-time menu items further enhance revenue opportunities by encouraging repeat visits and attracting new customers.

Cheesecake Factory Financial Statement Overview

Summary

Solid operating and free-cash-flow generation (2025 OCF ~$301M; FCF ~$155M) alongside steady revenue growth and sustained profitability, but leverage remains a key constraint (debt ~1.4x equity) and margins are still relatively thin with some 2025 compression.

Income Statement

Revenue has grown steadily from 2021–2025, with 2025 up about 5% versus 2024. Profitability has also improved meaningfully since the 2020 loss year: operating profit margin is now mid‑single digits and net margin is ~4% in 2025 (slightly below 2024), indicating stable but still relatively thin restaurant-level profitability. A notable positive is the sharp improvement in gross profitability since 2023, though the modest margin compression in 2025 is a watch item.

Balance Sheet

Leverage remains the key constraint: debt is still high relative to equity (about 1.4x in 2025), though it improved dramatically from 2022–2024 levels when debt-to-equity was very elevated. Equity is relatively small versus the asset base, which limits financial flexibility if results soften. Overall, the balance sheet trend is improving, but leverage risk is still above what many investors prefer for a cyclical consumer business.

Cash Flow

Cash generation is solid, with operating cash flow of ~$301M and free cash flow of ~$155M in 2025. However, free cash flow declined versus 2024, and cash conversion is only moderate: free cash flow is roughly half of net income in 2025, suggesting ongoing reinvestment needs and/or working-capital swings. Operating cash flow relative to debt is modest, implying deleveraging capacity is present but not especially fast.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.75B	3.58B	3.44B	3.30B	2.93B
Gross Profit	2.94B	2.78B	1.41B	1.28B	1.20B
EBITDA	282.37M	282.90M	201.70M	132.76M	171.97M
Net Income	148.43M	156.78M	101.35M	43.12M	72.37M
Balance Sheet
Total Assets	3.26B	3.04B	2.84B	2.78B	2.80B
Cash, Cash Equivalents and Short-Term Investments	215.73M	84.18M	56.29M	114.78M	189.63M
Total Debt	3.46B	1.91B	1.86B	1.84B	1.82B
Total Liabilities	2.83B	2.60B	2.52B	2.48B	2.47B
Stockholders Equity	436.43M	443.45M	318.06M	292.00M	330.17M
Cash Flow
Free Cash Flow	155.08M	107.96M	65.18M	48.78M	145.46M
Operating Cash Flow	301.28M	268.32M	218.40M	161.93M	213.01M
Investing Cash Flow	-147.26M	-161.10M	-153.50M	-112.81M	-68.61M
Financing Cash Flow	-22.78M	-78.79M	-123.53M	-123.64M	-108.83M

Cheesecake Factory Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 62.99
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAKE, the sentiment is Positive. The current price of 62.99 is above the 20-day moving average (MA) of 62.69, above the 50-day MA of 58.86, and above the 200-day MA of 56.41, indicating a bullish trend. The MACD of 1.46 indicates Positive momentum. The RSI at 54.67 is Neutral, neither overbought nor oversold. The STOCH value of 52.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CAKE.

Cheesecake Factory Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARCO	71 Outperform	$1.69B	2.36	39.04%	3.27%	1.21%	67.88%
CAKE	69 Neutral	$3.14B	15.71	33.74%	2.11%	4.90%	27.14%
EAT	64 Neutral	$6.01B	13.13	177.80%	―	23.18%	138.17%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SHAK	58 Neutral	$4.13B	71.38	9.19%	―	13.49%	402.23%
CBRL	45 Neutral	$683.69M	131.25	-0.90%	3.54%	-1.61%	-58.09%
PZZA	45 Neutral	$1.02B	42.31	―	4.72%	-0.64%	-60.71%

Cheesecake Factory Corporate Events

Cheesecake Factory Boosts Dividend and Buyback Authorization

The Cheesecake Factory, a multi-brand experiential dining operator with an in-house bakery business, reported fourth-quarter fiscal 2025 results on February 18, 2026, with total revenues rising to $961.6 million from $921.0 million a year earlier, aided by $17.3 million of gift card breakage revenue. Net income was $28.8 million, or $0.60 per diluted share, while adjusted net income reached $48.3 million, or $1.00 per share, despite a 2.2% year-over-year decline in comparable restaurant sales and $24.6 million in pre-tax net expenses tied to impairments, lease terminations, acquisition-related items and gift card adjustments.

Management highlighted record annual revenue for 2025, supported by 25 new restaurant openings, including seven in the fourth quarter, and reaffirmed an aggressive development pipeline targeting up to 26 new openings in fiscal 2026 across its Cheesecake Factory, North Italia, Flower Child and FRC concepts. The company ended 2025 with $582.2 million in available liquidity and $644.0 million in debt, repurchased about 228,100 shares for $11.2 million in the quarter, and on February 12, 2026, its board raised the quarterly dividend to $0.30 per share and expanded the share repurchase authorization to 66.0 million shares, moves that underscore confidence in cash generation and long-term value creation for shareholders amid a challenging restaurant industry backdrop.

The most recent analyst rating on (CAKE) stock is a Buy with a $70.00 price target. To see the full list of analyst forecasts on Cheesecake Factory stock, see the CAKE Stock Forecast page.