Cheesecake Factory (NASDAQ:CAKE) Reaches New 1-Year High - Should You Buy?

Key Points

• Cheesecake Factory shares hit a new 52-week high, trading as high as $76.54 and last at $76.27, well above the prior close of $73.27.
• Despite the stock’s run-up, analyst sentiment is mixed: Citigroup downgraded the stock to neutral, and the consensus rating is currently Hold with an average price target of $64.94.
• The company posted better-than-expected quarterly results, reporting $1.05 EPS on revenue of $978.83 million, and it also paid a quarterly dividend of $0.30 per share.

The Cheesecake Factory Incorporated (NASDAQ:CAKE - Get Free Report) reached a new 52-week high during mid-day trading on Wednesday . The stock traded as high as $76.54 and last traded at $76.27, with a volume of 483439 shares traded. The stock had previously closed at $73.27.

Analyst Ratings Changes

CAKE has been the topic of a number of research analyst reports. Citigroup downgraded Cheesecake Factory from a "buy" rating to a "neutral" rating in a report on Monday. Robert W. Baird set a $65.00 price objective on Cheesecake Factory in a research report on Thursday, April 30th. Argus set a $72.00 price objective on Cheesecake Factory in a research note on Friday, May 1st. Deutsche Bank Aktiengesellschaft reiterated a "hold" rating and issued a $68.00 target price on shares of Cheesecake Factory in a research report on Thursday, April 30th. Finally, Barclays increased their target price on shares of Cheesecake Factory from $58.00 to $60.00 and gave the stock an "underweight" rating in a report on Thursday, April 30th. Five investment analysts have rated the stock with a Buy rating, eleven have assigned a Hold rating and three have given a Sell rating to the company's stock. Based on data from MarketBeat, the company currently has an average rating of "Hold" and an average target price of $64.94.

Cheesecake Factory Stock Performance

The company's 50-day simple moving average is $62.89 and its 200-day simple moving average is $58.83. The stock has a market capitalization of $3.76 billion, a price-to-earnings ratio of 22.11, a PEG ratio of 1.77 and a beta of 1.04. The company has a current ratio of 0.59, a quick ratio of 0.53 and a debt-to-equity ratio of 1.22.

Cheesecake Factory (NASDAQ:CAKE - Get Free Report) last issued its quarterly earnings results on Wednesday, April 29th. The restaurant operator reported $1.05 EPS for the quarter, topping analysts' consensus estimates of $1.03 by $0.02. The company had revenue of $978.83 million for the quarter, compared to analyst estimates of $964.57 million. Cheesecake Factory had a net margin of 4.34% and a return on equity of 43.74%. Cheesecake Factory's revenue was up 5.6% compared to the same quarter last year. During the same quarter in the previous year, the business earned $0.93 earnings per share. On average, analysts expect that The Cheesecake Factory Incorporated will post 4.01 EPS for the current year.

Cheesecake Factory Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Tuesday, May 26th. Investors of record on Wednesday, May 13th were paid a $0.30 dividend. This represents a $1.20 dividend on an annualized basis and a dividend yield of 1.6%. The ex-dividend date of this dividend was Wednesday, May 13th. Cheesecake Factory's payout ratio is currently 35.09%.

Insider Activity at Cheesecake Factory

In other news, Chairman David Overton sold 104,000 shares of the business's stock in a transaction that occurred on Friday, May 1st. The shares were sold at an average price of $61.02, for a total value of $6,346,080.00. Following the transaction, the chairman owned 3,079,779 shares in the company, valued at approximately $187,928,114.58. The trade was a 3.27% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, Director Alexander L. Cappello sold 2,490 shares of the company's stock in a transaction on Tuesday, June 2nd. The shares were sold at an average price of $64.90, for a total transaction of $161,601.00. Following the completion of the sale, the director directly owned 6,171 shares in the company, valued at approximately $400,497.90. This represents a 28.75% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Corporate insiders own 8.00% of the company's stock.

Institutional Trading of Cheesecake Factory

A number of institutional investors have recently bought and sold shares of CAKE. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. increased its holdings in Cheesecake Factory by 4.6% in the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 28,742 shares of the restaurant operator's stock worth $1,399,000 after purchasing an additional 1,268 shares in the last quarter. Woodline Partners LP increased its stake in shares of Cheesecake Factory by 30.9% in the 1st quarter. Woodline Partners LP now owns 92,664 shares of the restaurant operator's stock valued at $4,509,000 after acquiring an additional 21,887 shares in the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its position in shares of Cheesecake Factory by 8.5% during the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 109,800 shares of the restaurant operator's stock valued at $5,343,000 after acquiring an additional 8,592 shares during the period. Northwestern Mutual Wealth Management Co. boosted its stake in Cheesecake Factory by 32.0% during the second quarter. Northwestern Mutual Wealth Management Co. now owns 1,333 shares of the restaurant operator's stock worth $83,000 after acquiring an additional 323 shares in the last quarter. Finally, First Trust Advisors LP boosted its stake in Cheesecake Factory by 5.0% during the second quarter. First Trust Advisors LP now owns 112,020 shares of the restaurant operator's stock worth $7,019,000 after acquiring an additional 5,326 shares in the last quarter. Institutional investors own 94.48% of the company's stock.

About Cheesecake Factory

The Cheesecake Factory Incorporated NASDAQ: CAKE is an American restaurant company and distributor renowned for its full-service casual-dining concept and specialty cheesecakes. Headquartered in Calabasas Hills, California, the company operates more than 200 restaurants under The Cheesecake Factory® brand across the United States, Puerto Rico and select international markets. In addition to sit-down dining, Cheesecake Factory franchised locations offer catering and take-out services, while a separate manufacturing arm supplies branded cheesecakes and desserts to supermarkets, hotels and other foodservice operators.

The origins of the brand trace back to a small cheesecake bakery founded in Detroit in the 1940s.

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