Analyzing Cheesecake Factory (NASDAQ:CAKE) and CAVA Group (NYSE:CAVA)

Cheesecake Factory (NASDAQ:CAKE) and CAVA Group (NYSE:CAVA) are both mid-cap consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Analyst Recommendations

This is a summary of current recommendations and price targets for Cheesecake Factory and CAVA Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cheesecake Factory	2	11	4	1	2.22
CAVA Group	0	10	17	1	2.68

Cheesecake Factory currently has a consensus price target of $92.67, indicating a potential downside of 18.99%. CAVA Group has a consensus price target of $88.62, indicating a potential upside of 61.45%. Given CAVA Group’s stronger consensus rating and higher possible upside, analysts clearly believe CAVA Group is more favorable than Cheesecake Factory.

Profitability

This table compares Cheesecake Factory and CAVA Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cheesecake Factory	4.61%	43.97%	6.18%
CAVA Group	4.82%	8.28%	4.73%

Insider and Institutional Ownership

94.5% of Cheesecake Factory shares are owned by institutional investors. Comparatively, 73.2% of CAVA Group shares are owned by institutional investors. 8.0% of Cheesecake Factory shares are owned by insiders. Comparatively, 6.7% of CAVA Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Cheesecake Factory has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500. Comparatively, CAVA Group has a beta of 1.8, suggesting that its share price is 80% more volatile than the S&P 500.

Earnings and Valuation

This table compares Cheesecake Factory and CAVA Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cheesecake Factory	$3.75 billion	1.52	$148.43 million	$3.69	31.00
CAVA Group	$1.18 billion	5.44	$63.74 million	$0.55	99.80

Cheesecake Factory has higher revenue and earnings than CAVA Group. Cheesecake Factory is trading at a lower price-to-earnings ratio than CAVA Group, indicating that it is currently the more affordable of the two stocks.

About Cheesecake Factory

The Cheesecake Factory Incorporated operates and licenses restaurants in the United States and Canada. The company operates bakeries that produce cheesecakes and other baked products for its restaurants, international licensees, third-party bakery customers, external foodservice operators, retailers, and distributors. It operates restaurants under the brands comprising The Cheesecake Factory, North Italia, Flower Child, Fox Restaurant Concepts. The Cheesecake Factory Incorporated was founded in 1972 and is headquartered in Calabasas, California.

About CAVA Group

CAVA Group, Inc. owns and operates a chain of restaurants under the CAVA brand in the United States. The company also offers dips, spreads, and dressings through grocery stores. In addition, the company provides online and mobile ordering platforms. Cava Group, Inc. was founded in 2006 and is headquartered in Washington, the District of Columbia.