Cheesecake Factory (NASDAQ:CAKE) Sets New 12-Month High - Should You Buy?

Key Points

• Cheesecake Factory shares hit a new 52-week high, trading as high as $85.40 and last around $85.49, extending a strong rally in the stock.
• Analysts remain mixed but have been raising targets: Citigroup now has a $90 price target and a Buy rating, while the overall consensus is still Hold with an average target of $67.75.
• Recent fundamentals were solid, with quarterly EPS of $1.05 beating estimates and revenue of $978.83 million topping forecasts; the company also pays a $0.30 quarterly dividend, yielding about 1.4%.

The Cheesecake Factory Incorporated (NASDAQ:CAKE - Get Free Report) shares hit a new 52-week high during trading on Friday . The stock traded as high as $85.40 and last traded at $85.4870, with a volume of 85448 shares traded. The stock had previously closed at $83.31.

Analyst Ratings Changes

CAKE has been the topic of several recent research reports. Bank of America lifted their price target on shares of Cheesecake Factory from $66.00 to $79.00 and gave the company a "neutral" rating in a research note on Thursday, July 2nd. Citigroup increased their price objective on shares of Cheesecake Factory from $76.00 to $90.00 and gave the stock a "buy" rating in a research note on Friday, July 10th. Stephens raised their price objective on Cheesecake Factory from $61.00 to $65.00 and gave the company an "equal weight" rating in a report on Thursday, April 30th. JPMorgan Chase & Co. raised Cheesecake Factory from an "underweight" rating to a "neutral" rating and lifted their target price for the company from $58.00 to $68.00 in a research report on Thursday, May 14th. Finally, Oppenheimer upped their target price on Cheesecake Factory from $68.00 to $72.00 and gave the stock an "outperform" rating in a report on Tuesday, April 21st. Six research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and three have assigned a Sell rating to the stock. According to MarketBeat.com, the stock presently has an average rating of "Hold" and an average price target of $67.75.

Cheesecake Factory Stock Performance

The firm has a market capitalization of $4.27 billion, a price-to-earnings ratio of 25.09, a P/E/G ratio of 1.93 and a beta of 1.01. The stock's fifty day moving average is $70.88 and its two-hundred day moving average is $63.40. The company has a quick ratio of 0.53, a current ratio of 0.59 and a debt-to-equity ratio of 1.22.

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

Cheesecake Factory Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Tuesday, May 26th. Stockholders of record on Wednesday, May 13th were issued a $0.30 dividend. This represents a $1.20 dividend on an annualized basis and a dividend yield of 1.4%. The ex-dividend date of this dividend was Wednesday, May 13th. Cheesecake Factory's dividend payout ratio is presently 35.09%.

Insider Activity

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

Institutional Trading of Cheesecake Factory

Hedge funds have recently made changes to their positions in the business. Salomon & Ludwin LLC increased its holdings in shares of Cheesecake Factory by 226.5% during the 4th quarter. Salomon & Ludwin LLC now owns 604 shares of the restaurant operator's stock worth $33,000 after acquiring an additional 419 shares during the last quarter. NFSG Corp raised its stake in Cheesecake Factory by 115.8% in the 1st quarter. NFSG Corp now owns 682 shares of the restaurant operator's stock valued at $37,000 after acquiring an additional 366 shares during the period. Global Retirement Partners LLC lifted its holdings in Cheesecake Factory by 661.7% during the 4th quarter. Global Retirement Partners LLC now owns 716 shares of the restaurant operator's stock valued at $36,000 after purchasing an additional 622 shares during the last quarter. Root Financial Partners LLC lifted its holdings in Cheesecake Factory by 973.2% during the 4th quarter. Root Financial Partners LLC now owns 880 shares of the restaurant operator's stock valued at $44,000 after purchasing an additional 798 shares during the last quarter. Finally, Arax Advisory Partners acquired a new stake in Cheesecake Factory during the 4th quarter valued at $50,000. 94.48% of the stock is owned by institutional investors and hedge funds.

Cheesecake Factory Company Profile

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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