Cheesecake Factory (NASDAQ:CAKE) Stock Rating Lowered by Zacks Research

Key Points

• Zacks Research downgraded Cheesecake Factory from “strong buy” to “hold,” contributing to a consensus “hold” rating. Analysts’ consensus price target is $95.47, below the referenced $113.12 share price.
• Despite the downgrade, the company reported a quarterly earnings beat, with EPS of $1.02 versus the $0.96 estimate and revenue of $1.03 billion, up 13.9% year over year.
• Shares were trading near their 12-month high after rising 7%, but valuation concerns persist; insiders sold roughly $14.1 million of stock over the past 90 days, while institutional investors own 94.48% of the company.

Cheesecake Factory (NASDAQ:CAKE - Get Free Report) was downgraded by analysts at Zacks Research from a "strong-buy" rating to a "hold" rating in a report released on Wednesday, Zacks reports.

A number of other brokerages also recently weighed in on CAKE. Bank of America increased their price target on Cheesecake Factory from $66.00 to $79.00 and gave the stock a "neutral" rating in a report on Thursday, July 2nd. Argus boosted their price objective on Cheesecake Factory from $72.00 to $110.00 and gave the company a "buy" rating in a research note on Thursday, July 30th. Stephens restated an "equal weight" rating and set a $100.00 target price on shares of Cheesecake Factory in a research report on Wednesday. Jefferies Financial Group cut Cheesecake Factory from a "buy" rating to a "hold" rating and raised their target price for the stock from $75.00 to $88.00 in a research note on Wednesday, July 29th. Finally, Weiss Ratings upgraded Cheesecake Factory from a "buy (b)" rating to a "buy (b+)" rating in a report on Thursday, October 8th. One investment analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating, twelve have given a Hold rating and two have given a Sell rating to the company's stock. According to data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and a consensus target price of $95.47.

Cheesecake Factory Trading Up 7.0%

CAKE opened at $113.12 on Wednesday. Cheesecake Factory has a twelve month low of $43.07 and a twelve month high of $118.63. The company has a quick ratio of 0.52, a current ratio of 0.59 and a debt-to-equity ratio of 1.08. The company has a fifty day moving average of $107.90 and a 200-day moving average of $79.42. The stock has a market cap of $5.63 billion, a PE ratio of 26.81, a price-to-earnings-growth ratio of 1.48 and a beta of 1.04.

Cheesecake Factory (NASDAQ:CAKE - Get Free Report) last announced its earnings results on Tuesday, October 27th. The restaurant operator reported $1.02 earnings per share for the quarter, topping analysts' consensus estimates of $0.96 by $0.06. The business had revenue of $1.03 billion during the quarter, compared to the consensus estimate of $1.01 billion. Cheesecake Factory had a net margin of 5.20% and a return on equity of 46.95%. Cheesecake Factory's quarterly revenue was up 13.9% on a year-over-year basis. During the same quarter last year, the firm earned $0.66 earnings per share. On average, sell-side analysts predict that Cheesecake Factory will post 4.75 EPS for the current year.

Insider Activity at Cheesecake Factory

In other news, Director Janice L. Meyer sold 1,958 shares of the company's stock in a transaction dated Monday, August 17th. The shares were sold at an average price of $109.36, for a total transaction of $214,126.88. Following the transaction, the director owned 21,251 shares in the company, valued at approximately $2,324,009.36. This represents a 8.44% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, Director Edie Ames sold 3,000 shares of the stock in a transaction dated 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 position. The SEC filing for this sale provides additional information. In the last ninety days, insiders sold 131,176 shares of company stock valued at $14,068,161. 8.00% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in the company. Money Concepts Capital Corp grew its holdings in shares of Cheesecake Factory by 3.8% during the first quarter. Money Concepts Capital Corp now owns 5,802 shares of the restaurant operator's stock valued at $318,000 after buying an additional 210 shares during the last quarter. SBI Securities Co. Ltd. increased its position in shares of Cheesecake Factory by 28.2% during the third quarter. SBI Securities Co. Ltd. now owns 1,146 shares of the restaurant operator's stock worth $121,000 after acquiring an additional 252 shares in the last quarter. Root Financial Partners LLC bought a new stake in shares of Cheesecake Factory during the third quarter worth about $35,000. Carolina Wealth Advisors LLC bought a new stake in shares of Cheesecake Factory during the third quarter worth about $36,000. Finally, NFSG Corp raised its holdings in shares of Cheesecake Factory by 115.8% in the 1st quarter. NFSG Corp now owns 682 shares of the restaurant operator's stock worth $37,000 after acquiring an additional 366 shares during the last quarter. 94.48% of the stock is owned by institutional investors and hedge funds.

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.

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