Cheesecake Factory (NASDAQ:CAKE) Stock Rating Raised to Strong-Buy at Freedom Capital

Cheesecake Factory (NASDAQ:CAKE) was upgraded by equities researchers at Freedom Capital from a “hold” rating to a “strong-buy” rating in a report released on Wednesday, Zacks reports.

A number of other brokerages have also recently weighed in on CAKE. William Blair reiterated an “outperform” rating on shares of Cheesecake Factory in a research note on Thursday. JPMorgan Chase & Co. raised their target price on shares of Cheesecake Factory from $92.00 to $105.00 and gave the stock a “neutral” rating in a research report on Wednesday, August 26th. Citigroup lowered their target price on shares of Cheesecake Factory from $128.00 to $127.00 and set a “buy” rating on the stock in a research report on Wednesday. Argus upped their price target on shares of Cheesecake Factory from $72.00 to $110.00 and gave the company a “buy” rating in a research report on Thursday, July 30th. Finally, Weiss Ratings upgraded shares of Cheesecake Factory from a “buy (b)” rating to a “buy (b+)” rating in a research note on Thursday, October 8th. One research analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating, twelve have assigned a Hold rating and two have given a Sell rating to the company’s stock. Based on data from MarketBeat.com, the company has an average rating of “Hold” and a consensus target price of $95.47.

Cheesecake Factory Stock Up 7.0%

Cheesecake Factory stock opened at $113.12 on Wednesday. Cheesecake Factory has a 1-year low of $43.07 and a 1-year high of $118.63. The company has a debt-to-equity ratio of 1.08, a current ratio of 0.59 and a quick ratio of 0.52. The stock has a market cap of $5.63 billion, a PE ratio of 26.81, a P/E/G ratio of 1.48 and a beta of 1.04. The stock’s fifty day moving average is $107.90 and its two-hundred day moving average is $79.42.

Cheesecake Factory (NASDAQ:CAKE) last released its quarterly earnings data on Tuesday, October 27th. The restaurant operator reported $1.02 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.96 by $0.06. The business had revenue of $1.03 billion during the quarter, compared to analysts’ expectations of $1.01 billion. Cheesecake Factory had a return on equity of 46.95% and a net margin of 5.20%. The business’s quarterly revenue was up 13.9% compared to the same quarter last year. During the same period in the prior year, the firm posted $0.66 EPS. On average, sell-side analysts expect that Cheesecake Factory will post 4.75 EPS for the current fiscal year.

Insider Buying and Selling

In related news, Director Edie Ames sold 3,000 shares of the stock in a transaction on Monday, August 10th. The stock was sold at an average price of $106.95, for a total transaction of $320,850.00. Following the completion of the sale, the director directly owned 10,000 shares of the company’s stock, valued at $1,069,500. This trade represents a 23.08% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, President David Gordon sold 31,950 shares of Cheesecake Factory stock in a transaction on Monday, August 10th. The shares were sold at an average price of $110.03, for a total transaction of $3,515,458.50. Following the completion of the transaction, the president owned 26,875 shares in the company, valued at approximately $2,957,056.25. This trade represents a 54.31% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold 131,176 shares of company stock valued at $14,068,161 in the last ninety days. Company insiders own 8.00% of the company’s stock.

Institutional Trading of Cheesecake Factory

Several hedge funds and other institutional investors have recently made changes to their positions in CAKE. Dimensional Fund Advisors LP raised its holdings in Cheesecake Factory by 2.4% during the first quarter. Dimensional Fund Advisors LP now owns 1,242,143 shares of the restaurant operator’s stock worth $68,008,000 after purchasing an additional 29,037 shares in the last quarter. Bank of New York Mellon Corp acquired a new stake in Cheesecake Factory in the second quarter valued at about $38,020,000. Bamco Inc. NY purchased a new stake in Cheesecake Factory in the 2nd quarter valued at approximately $35,793,000. PDT Partners LLC purchased a new stake in Cheesecake Factory in the 2nd quarter valued at approximately $13,743,000. Finally, TD Waterhouse Canada Inc. purchased a new stake in Cheesecake Factory in the 3rd quarter valued at approximately $13,792,000. Hedge funds and other institutional investors own 94.48% of the company’s stock.

Cheesecake Factory News Summary

Here are the key news stories impacting Cheesecake Factory this week:

• Positive Sentiment: Strong traffic and earnings beat: Third-quarter revenue exceeded $1.033 billion, while flagship restaurant guest traffic increased 9.5%. CAKE reported $1.02 in EPS versus the $0.96 consensus estimate, and revenue grew 13.9% year over year. Cheesecake Factory: 3 Key Takeaways for Long-Term Investors
• Positive Sentiment: Expansion supports the longer-term outlook: Management highlighted improving margins, strong traffic and plans to expand the Flower Child concept in 2027, although North Italia remains a challenge. CAKE Q3 Earnings Call Highlights Strong Traffic and 2027 Expansion
• Positive Sentiment: Some analyst support remains: Citigroup maintained a Buy rating while trimming its price target slightly to $127, implying upside from the referenced price level. Citigroup stock recommendations
• Neutral Sentiment: Dividend maintained: CAKE declared a $0.30-per-share quarterly dividend, or $1.20 annualized, with a stated yield of approximately 1.1%. The ex-dividend date is November 10.
• Negative Sentiment: Valuation concerns are weighing on shares: Stephens reaffirmed an Equal Weight rating with a $100 target, while UBS maintained a Sell rating and an $80 target, arguing that the stock’s valuation is stretched. The move below the 50-day average followed an analyst downgrade. Cheesecake Factory stock crosses below 50 day moving average
• Neutral Sentiment: Political attention is generating publicity but little direct financial impact: Multiple reports focused on Barack Obama’s jokes about the chain and the resulting political backlash. The coverage may increase brand visibility, but it does not change CAKE’s earnings outlook or fundamentals.

Cheesecake Factory Company Profile

The Cheesecake Factory Incorporated is a restaurant company best known for The Cheesecake Factory, a full-service casual dining brand offering an extensive menu of American and international-inspired dishes, along with a broad selection of cheesecakes and other desserts. The company also operates North Italia, an Italian restaurant concept, and owns Fox Restaurant Concepts, which develops and operates additional restaurant brands, including Flower Child and Culinary Dropout.

The company was founded by David Overton, who opened the first Cheesecake Factory restaurant in Beverly Hills, California, in 1978 after his parents began a cheesecake business.