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Cheesecake Factory (CAKE)
NASDAQ:CAKE
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Cheesecake Factory (CAKE) AI Stock Analysis

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CAKE

Cheesecake Factory

(NASDAQ:CAKE)

Rating:65Neutral
Price Target:
$67.00
▲(8.59% Upside)
The Cheesecake Factory's overall stock score is driven by strong earnings performance and operational excellence, as highlighted in the recent earnings call. Financial performance is solid, but high leverage poses a risk. Technical indicators suggest mixed momentum, and valuation appears fair. The company's ability to manage debt and sustain profitability will be key to future performance.
Positive Factors
Earnings
The Cheesecake Factory’s second-quarter adjusted EPS beat implied guidance and consensus estimates on better-than-expected sales growth.
Market Position
The company is expected to continue gaining market share with its differentiated, experiential brands.
Operational Performance
Margins are in good shape with record labor retention, driving operational execution.
Negative Factors
Guidance
Management is reducing sales guidance by about 1% due to potential uncertainty.
Outlook
The 2025 outlook was trimmed to the lower end due to macroeconomic uncertainty.

Cheesecake Factory (CAKE) vs. SPDR S&P 500 ETF (SPY)

Cheesecake Factory Business Overview & Revenue Model

Company DescriptionThe Cheesecake Factory Incorporated (CAKE) is a renowned American restaurant chain and manufacturer of cheesecakes, recognized for its extensive menu featuring over 250 dishes, including appetizers, salads, pizzas, pasta, seafood, and more. Established in 1978, the company operates more than 200 locations across the United States and internationally, providing a casual dining experience with a focus on quality ingredients and exceptional service. In addition to its signature cheesecakes, the company also offers a variety of desserts and beverages, catering to a broad customer base that values diverse dining options.
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:Oct 29, 2025
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
75
Positive
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.
Balance Sheet
60
Neutral
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.
Cash Flow
70
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue3.67B3.58B3.44B3.30B2.93B1.98B
Gross Profit2.23B2.78B1.41B1.28B1.20B746.31M
EBITDA283.11M282.90M202.90M174.47M208.52M-255.92M
Net Income158.90M156.78M101.35M43.12M72.37M-253.37M
Balance Sheet
Total Assets3.15B3.04B2.84B2.78B2.80B2.75B
Cash, Cash Equivalents and Short-Term Investments148.76M84.18M56.29M114.78M189.63M154.09M
Total Debt2.10B1.91B1.86B1.84B1.82B1.64B
Total Liabilities2.75B2.60B2.52B2.48B2.47B2.24B
Stockholders Equity400.95M443.45M318.06M292.00M330.17M506.94M
Cash Flow
Free Cash Flow131.00M107.96M65.18M48.78M145.46M-48.01M
Operating Cash Flow309.64M268.32M218.40M161.93M213.01M2.91M
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-108.83M143.69M

Cheesecake Factory Technical Analysis

Technical Analysis Sentiment
Positive
Last Price61.70
Price Trends
50DMA
62.86
Negative
100DMA
57.86
Positive
200DMA
53.66
Positive
Market Momentum
MACD
-0.28
Positive
RSI
47.35
Neutral
STOCH
27.51
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 61.7 is below the 20-day moving average (MA) of 62.09, below the 50-day MA of 62.86, and above the 200-day MA of 53.66, indicating a neutral trend. The MACD of -0.28 indicates Positive momentum. The RSI at 47.35 is Neutral, neither overbought nor oversold. The STOCH value of 27.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
67
Neutral
$1.15B286.540.69%14.53%-83.26%
66
Neutral
$6.94B19.14186.74%21.95%146.44%
66
Neutral
$4.52B227.424.16%13.13%-25.05%
65
Neutral
$3.06B18.9141.01%1.75%4.77%38.24%
64
Neutral
$1.33B21.2412.90%1.85%2.84%-4.44%
63
Neutral
$1.96B10.7299.35%7.78%1.31%-1.46%
61
Neutral
$17.59B13.29-5.28%3.05%1.25%-14.67%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CAKE
Cheesecake Factory
61.70
23.82
62.88%
EAT
Brinker International
159.06
87.30
121.66%
CBRL
Cracker Barrel
54.09
16.71
44.70%
WEN
Wendy's
10.02
-5.81
-36.70%
SHAK
Shake Shack
105.18
9.05
9.41%
FWRG
First Watch Restaurant Group
18.37
2.52
15.90%

Cheesecake Factory Corporate Events

DividendsBusiness Operations and StrategyFinancial Disclosures
Cheesecake Factory Reports Q2 2025 Financial Results
Positive
Jul 29, 2025

On July 29, 2025, The Cheesecake Factory reported its financial results for the second quarter of fiscal 2025, revealing total revenues of $955.8 million, a rise from $904.0 million in the same quarter of fiscal 2024. The company achieved a net income of $54.8 million, with comparable restaurant sales increasing by 1.2% year-over-year. The company opened eight new restaurants during the quarter and plans to open up to 25 new locations by the end of the year. The Board declared a quarterly dividend of $0.27 per share, to be paid on August 26, 2025.

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.Date of analysis: Aug 22, 2025