Cheesecake Factory (NASDAQ:CAKE) Stock Bumped Down to Hold by Zacks Research

Zacks Research downgraded shares of Cheesecake Factory (NASDAQ:CAKE) from a strong-buy rating to a hold rating in a research note published on Wednesday morning,Zacks reports.

Other equities analysts also recently issued research reports about the company. Robert W. Baird boosted their target price on Cheesecake Factory from $105.00 to $120.00 and gave the stock a “neutral” rating in a research note on Thursday, October 22nd. Oppenheimer lifted their price target on Cheesecake Factory from $101.00 to $122.00 and gave the stock an “outperform” rating in a report on Tuesday, October 6th. William Blair reissued an “outperform” rating on shares of Cheesecake Factory in a research report on Thursday. JPMorgan Chase & Co. raised their target price on Cheesecake Factory from $92.00 to $105.00 and gave the company a “neutral” rating in a research report on Wednesday, August 26th. Finally, Weiss Ratings raised shares of Cheesecake Factory from a “buy (b)” rating to a “buy (b+)” rating in a report on Thursday, October 8th. One equities 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 stock. According to data from MarketBeat.com, the stock presently has a consensus rating of “Hold” and an average target price of $95.47.

Cheesecake Factory Stock Performance

Shares of CAKE stock opened at $113.12 on Wednesday. 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 firm has a 50-day moving average of $107.90 and a 200-day moving average of $79.42. Cheesecake Factory has a one year low of $43.07 and a one year high of $118.63. The company has a market cap of $5.63 billion, a P/E ratio of 26.81, a P/E/G ratio of 1.48 and a beta of 1.04.

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

Cheesecake Factory Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, November 24th. Investors of record on Tuesday, November 10th will be paid a $0.30 dividend. This represents a $1.20 dividend on an annualized basis and a yield of 1.1%. The ex-dividend date is Tuesday, November 10th. Cheesecake Factory’s payout ratio is currently 32.52%.

Insider Activity

In other news, President David M. Gordon sold 31,950 shares of the stock in a transaction dated Monday, August 10th. The stock was sold at an average price of $110.03, for a total transaction of $3,515,458.50. Following the transaction, the president directly owned 26,875 shares in the company, valued at approximately $2,957,056.25. This represents a 54.31% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, Director Edie A. Ames sold 3,000 shares of Cheesecake Factory stock in a transaction that occurred 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 transaction, the director directly owned 10,000 shares in the company, valued at $1,069,500. This trade represents a 23.08% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold a total of 131,176 shares of company stock valued at $14,068,161 over the last ninety days. 8.00% of the stock is owned by insiders.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently modified their holdings of CAKE. Root Financial Partners LLC purchased a new position in shares of Cheesecake Factory in the third quarter worth $35,000. Carolina Wealth Advisors LLC bought a new position in shares of Cheesecake Factory during the third quarter valued at about $36,000. Allworth Financial LP bought a new position in shares of Cheesecake Factory during the second quarter valued at about $36,000. NFSG Corp boosted its holdings in shares of Cheesecake Factory by 115.8% during the first quarter. NFSG Corp now owns 682 shares of the restaurant operator’s stock worth $37,000 after purchasing an additional 366 shares during the period. Finally, Global Retirement Partners LLC purchased a new stake in shares of Cheesecake Factory during the second quarter worth about $57,000. 94.48% of the stock is owned by institutional investors.

Key Stories Impacting Cheesecake Factory

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.

About Cheesecake Factory

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.