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Cheesecake Factory (CAKE)
NASDAQ:CAKE
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Cheesecake Factory
(NASDAQ:CAKE)
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Select Model
Rating:67Neutral
Price Target:
$50.00
▲(4.73% Upside)
The overall stock score reflects a balanced view of The Cheesecake Factory's strengths and challenges. Strong financial performance and promising expansion plans are offset by high leverage and bearish technical indicators. The valuation is reasonable, providing some support to the stock's attractiveness.
Positive Factors
Expansion Plans
Aggressive expansion plans indicate a strong growth strategy, enhancing market presence and potential revenue streams, supporting long-term growth.
Profit Margin Improvements
Improved profit margins reflect efficient cost management and operational effectiveness, contributing to sustainable profitability and financial health.
Cash Flow Generation
Strong cash flow generation enhances financial flexibility, supporting reinvestment in growth initiatives and debt reduction, bolstering long-term stability.
Negative Factors
High Leverage
Excessive leverage poses financial risks, potentially limiting flexibility and increasing vulnerability to economic downturns, impacting long-term stability.
Consumer Environment Challenges
A challenging consumer environment can hinder sales growth and profitability, requiring strategic adjustments to maintain competitive positioning.
Macroeconomic Uncertainties
Macroeconomic uncertainties can affect consumer spending and business operations, posing risks to revenue stability and growth prospects.
Cheesecake Factory (CAKE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.38B
Dividend Yield2.26%
Average Volume (3M)1.47M
Price to Earnings (P/E)14.5
Beta (1Y)0.87
Revenue Growth4.90%
EPS Growth27.14%
CountryUS
Employees47,900
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)0.68
Shares Outstanding49,841,690
10 Day Avg. Volume1,189,933
30 Day Avg. Volume1,473,501
Financial Highlights & Ratios
PEG Ratio0.26
Price to Book (P/B)5.11
Price to Sales (P/S)0.63
P/FCF Ratio21.00
Enterprise Value/Market Cap1.94
Enterprise Value/Revenue1.26
Enterprise Value/Gross Profit2.06
Enterprise Value/Ebitda16.15
Forecast
1Y Price Target
$58.42Price Target Upside22.37% Upside
Rating ConsensusHold
Number of Analyst Covering13
EPS Forecast (FY)3.76
Revenue Forecast (FY)$3.74B
Cheesecake Factory Business Overview & Revenue Model
Company DescriptionThe 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 MoneyThe Cheesecake Factory primarily generates revenue through its restaurant operations, which include dine-in, takeout, and delivery services. The company's revenue model is heavily reliant on food and beverage sales in its restaurants, complemented by the sale of its branded cheesecakes through retail partnerships and its own bakery operations. Key revenue streams include dining services, dessert sales, and wholesale distribution of its cheesecakes to grocery stores and other food service entities. Significant partnerships with grocery chains and the growth of its takeout and delivery services have further contributed to its earnings, alongside expanding its brand presence in the food retail market.
Cheesecake Factory Earnings Call Summary
Earnings Call Date:Jul 29, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 25, 2026
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance with record-breaking revenue and significant improvement in profit margins, supported by robust sales growth in the Cheesecake Factory, North Italia, and Flower Child segments. Operational excellence and successful new restaurant openings further reinforce the positive outlook. However, challenges such as the North Italia comparable sales decline and traffic declines indicate areas needing attention.Q2-2025 Updates
Positive Updates
Record-Breaking Revenue
Total revenues reached $956 million, with adjusted net income margin of 5.8%, exceeding the high end of the guidance ranges provided.
Strong Comparable Sales Growth
Comparable sales at The Cheesecake Factory restaurants increased 1.2%, with record high average weekly sales driving realized unit volumes to nearly $12.8 million for the quarter.
Profit Margin Improvement
Cheesecake Factory's 4-wall restaurant margin increased to 18.5%, up 80 basis points year-over-year, the highest level recorded in 8 years.
Successful New Restaurant Openings
Successfully opened 8 restaurants in the second quarter, including 2 Cheesecake Factory restaurants, 1 North Italia, 3 Flower Child, and 2 FRC restaurants.
North Italia Performance
Second quarter annualized AUVs for North Italia increased 2%, reaching $8 million, with early performance in new markets exceeding expectations by 40% above Q2 system average.
Flower Child Growth
Second quarter comparable sales for Flower Child increased 4%, significantly outperforming the Black Box fast casual dining index, with average weekly sales reaching $91,400.
Operational Excellence
Notable improvements in labor productivity, food efficiencies, and wage management, with internal Net Promoter Score metrics improving across nearly all key areas.
Negative Updates
North Italia Comparable Sales Decline
Comparable sales for North Italia declined 1%, reflecting continued impact from the Los Angeles fires and sales transfer impact from new restaurants.
Traffic Decline
Traffic was negative 1.1% at Cheesecake Factory, and negative 4% at North Italia, impacting overall sales performance.
Increase in Operating Expenses
Other operating expenses increased 40 basis points, primarily driven by higher facility-related costs.
Company Guidance
During The Cheesecake Factory's Q2 2025 earnings call, the company reported record-high results, with consolidated revenues reaching $956 million and adjusted earnings per share setting new milestones. The Cheesecake Factory restaurants saw comparable sales increase by 1.2%, driving average weekly sales to nearly $12.8 million, while North Italia reported a 2% increase in annualized AUVs to $8 million despite a 1% decline in comparable sales. Flower Child's comparable sales surged by 4%, resulting in average weekly sales of $91,400. The company's 4-wall restaurant margin improved by 80 basis points year-over-year to 18.5%, marking the highest level in eight years, thanks to operational excellence and demand across its high-quality concepts. The company successfully opened eight new restaurants in the quarter and plans to open up to 25 new restaurants in 2025. Looking ahead, The Cheesecake Factory anticipates total revenues for fiscal 2025 to be approximately $3.76 billion, with a focus on operational execution, strategic menu innovations, and leveraging its rewards program to drive engagement and loyalty.Cheesecake Factory Financial Statement Overview
Summary
The Cheesecake Factory demonstrates solid financial performance with strong profitability and cash flow generation. However, high leverage remains a concern, potentially impacting long-term financial stability. Continued focus on managing debt levels and maintaining profitability will be crucial for sustaining growth.Income Statement
The Cheesecake Factory shows a strong gross profit margin of 60.88% TTM, indicating efficient cost management. The net profit margin is stable at 4.33% TTM, with consistent revenue growth over the past years, albeit at a slower rate recently. EBIT and EBITDA margins are healthy, reflecting operational efficiency. However, the slight decline in margins compared to previous years suggests some pressure on profitability.75
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 5.24 TTM, indicating significant leverage, which could pose financial risk. Return on equity is strong at 40.22% TTM, showcasing effective use of equity to generate profits. However, the equity ratio is low, suggesting reliance on debt financing, which may impact financial stability.60
Neutral
Cash Flow
Cash flow analysis shows a positive trend with a 15.15% growth in free cash flow TTM, indicating improved cash generation. The operating cash flow to net income ratio of 0.42 TTM suggests adequate cash flow relative to earnings. However, the free cash flow to net income ratio is moderate, pointing to potential constraints in cash availability for expansion or debt reduction.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.67B | 3.58B | 3.44B | 3.30B | 2.93B | 1.98B |
| Gross Profit | 2.23B | 2.78B | 1.41B | 1.28B | 1.20B | 746.31M |
| EBITDA | 285.10M | 282.90M | 201.70M | 132.76M | 171.97M | -255.92M |
| Net Income | 158.90M | 156.78M | 101.35M | 43.12M | 72.37M | -253.37M |
Balance Sheet | ||||||
| Total Assets | 3.15B | 3.04B | 2.84B | 2.78B | 2.80B | 2.75B |
| Cash, Cash Equivalents and Short-Term Investments | 148.76M | 84.18M | 56.29M | 114.78M | 189.63M | 154.09M |
| Total Debt | 2.10B | 1.91B | 1.86B | 1.84B | 1.82B | 1.64B |
| Total Liabilities | 2.75B | 2.60B | 2.52B | 2.48B | 2.47B | 2.24B |
| Stockholders Equity | 400.95M | 443.45M | 318.06M | 292.00M | 330.17M | 506.94M |
Cash Flow | ||||||
| Free Cash Flow | 131.00M | 107.96M | 65.18M | 48.78M | 145.46M | -48.01M |
| Operating Cash Flow | 309.64M | 268.32M | 218.40M | 161.93M | 213.01M | 2.91M |
| Investing Cash Flow | -179.19M | -161.10M | -153.50M | -112.81M | -68.61M | -50.91M |
| Financing Cash Flow | -22.36M | -78.79M | -123.53M | -123.64M | -108.83M | 143.69M |
Cheesecake Factory Technical Analysis
Neutral
47.74
Price Trends
51.02
Negative
56.32
Negative
54.24
Negative
Market Momentum
-1.70
Negative
49.23
Neutral
79.62
Neutral
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 47.74 is above the 20-day moving average (MA) of 46.26, below the 50-day MA of 51.02, and below the 200-day MA of 54.24, indicating a neutral trend. The MACD of -1.70 indicates Negative momentum. The RSI at 49.23 is Neutral, neither overbought nor oversold. The STOCH value of 79.62 is Neutral, 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $1.54B | 6.28 | 39.04% | 3.28% | 1.21% | 67.88% | |
70 Neutral | $6.74B | 15.74 | 249.07% | ― | 23.18% | 138.17% | |
67 Neutral | $2.38B | 14.50 | 39.14% | 2.26% | 4.90% | 27.14% | |
62 Neutral | $3.78B | 86.92 | 8.83% | ― | 13.49% | 402.23% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $640.89M | 13.94 | 10.29% | 3.47% | 0.37% | 12.99% | |
56 Neutral | $1.37B | 36.92 | ― | 4.40% | -0.64% | -60.71% |
* Consumer Cyclical Sector Average
CAKE
Cheesecake Factory
47.74
-0.80
-1.65%
ARCO
Arcos Dorados Holdings
7.31
-0.60
-7.59%
EAT
Brinker International
151.77
21.56
16.56%
CBRL
Cracker Barrel
28.78
-26.69
-48.12%
PZZA
Papa John's International
41.86
-6.06
-12.65%
SHAK
Shake Shack
88.48
-45.01
-33.72%
Cheesecake Factory Corporate Events
Cheesecake Factory Navigates Challenges in Earnings Call
Oct 30, 2025
The Cheesecake Factory’s recent earnings call painted a picture of a stable yet challenging business environment. The company demonstrated notable achievements in operational execution, menu innovation, and expansion efforts, but also faced hurdles such as consumer traffic declines, particularly at North Italia, and broader macroeconomic uncertainties. The sentiment was balanced, highlighting strong performance in certain areas and challenges in others.
The Cheesecake Factory’s Steady Growth in Q3 2025
Oct 29, 2025
The Cheesecake Factory Incorporated is a prominent player in the experiential dining sector, known for its diverse restaurant brands including The Cheesecake Factory, North Italia, and Flower Child, as well as its bakery division that supplies high-quality cheesecakes and baked goods.
Business Operations and StrategyDividendsFinancial Disclosures
Cheesecake Factory Reports Q3 2025 Financial Results
Positive
Oct 28, 2025
On October 28, 2025, The Cheesecake Factory reported its financial results for the third quarter of fiscal 2025, ending September 30, 2025, with total revenues of $907.2 million, up from $865.5 million in the same period of 2024. The company declared a quarterly dividend of $0.27 per share, to be paid on November 25, 2025, and highlighted its continued unit growth with new restaurant openings. Despite a challenging environment, the company achieved positive comparable sales and improved operational efficiencies, reinforcing its market position and long-term growth strategy.
The most recent analyst rating on (CAKE) stock is a Hold with a $61.00 price target. To see the full list of analyst forecasts on Cheesecake Factory stock, see the CAKE Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.