Cheesecake Factory (NASDAQ:CAKE) Shares Up 7% After Strong Earnings

Key Points

• Cheesecake Factory's shares rose 7% after reporting better-than-expected earnings with an EPS of $1.16, surpassing the consensus estimate of $1.06.
• The company announced a quarterly dividend of $0.27, representing an annualized dividend of $1.08 and a yield of 1.62%.
• Institutional investors own 94.48% of Cheesecake Factory's stock, which influences the company's market stability.

The Cheesecake Factory Incorporated (NASDAQ:CAKE - Get Free Report) traded up 7% on Wednesday following a stronger than expected earnings report. The company traded as high as $67.45 and last traded at $67.59. 600,175 shares changed hands during trading, a decline of 58% from the average session volume of 1,437,736 shares. The stock had previously closed at $63.18.

The restaurant operator reported $1.16 EPS for the quarter, beating analysts' consensus estimates of $1.06 by $0.10. Cheesecake Factory had a return on equity of 46.15% and a net margin of 4.33%. The business had revenue of $955.83 million during the quarter, compared to analyst estimates of $945.82 million. During the same period in the previous year, the company posted $1.09 EPS. The firm's revenue was up 5.7% compared to the same quarter last year.

Cheesecake Factory Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Tuesday, August 26th. Stockholders of record on Tuesday, August 12th will be issued a dividend of $0.27 per share. This represents a $1.08 annualized dividend and a dividend yield of 1.7%. The ex-dividend date is Tuesday, August 12th. Cheesecake Factory's dividend payout ratio (DPR) is presently 33.23%.

Analysts Set New Price Targets

CAKE has been the subject of a number of research analyst reports. Citigroup cut their target price on shares of Cheesecake Factory from $67.00 to $62.00 and set a "buy" rating for the company in a research report on Tuesday, April 15th. Bank of America raised their target price on shares of Cheesecake Factory from $61.00 to $67.00 and gave the stock a "neutral" rating in a research report on Friday, July 18th. The Goldman Sachs Group reaffirmed a "neutral" rating and set a $67.00 target price (up from $66.00) on shares of Cheesecake Factory in a research report on Thursday, July 10th. Stephens reiterated an "overweight" rating and set a $60.00 price objective on shares of Cheesecake Factory in a research note on Thursday, May 1st. Finally, Raymond James Financial lifted their price objective on shares of Cheesecake Factory from $63.00 to $70.00 and gave the stock an "outperform" rating in a research note on Thursday, July 17th. Four investment analysts have rated the stock with a sell rating, six have assigned a hold rating and seven have assigned a buy rating to the company. Based on data from MarketBeat.com, the stock has a consensus rating of "Hold" and a consensus price target of $61.06.

Insider Buying and Selling at Cheesecake Factory

In other news, EVP Scarlett May sold 20,800 shares of the business's stock in a transaction dated Thursday, May 29th. The stock was sold at an average price of $56.02, for a total transaction of $1,165,216.00. Following the completion of the transaction, the executive vice president owned 22,872 shares of the company's stock, valued at approximately $1,281,289.44. The trade was a 47.63% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CFO Matthew Eliot Clark sold 42,900 shares of the business's stock in a transaction dated Tuesday, May 27th. The stock was sold at an average price of $56.00, for a total value of $2,402,400.00. Following the transaction, the chief financial officer directly owned 40,878 shares of the company's stock, valued at $2,289,168. The trade was a 51.21% decrease in their position. The disclosure for this sale can be found here. In the last three months, insiders have sold 133,000 shares of company stock worth $7,456,992. Corporate insiders own 8.40% of the company's stock.

Institutional Trading of Cheesecake Factory

Several hedge funds and other institutional investors have recently bought and sold shares of CAKE. Ameritas Advisory Services LLC bought a new position in shares of Cheesecake Factory in the second quarter worth about $28,000. USA Financial Formulas acquired a new position in shares of Cheesecake Factory during the first quarter valued at approximately $49,000. Golden State Wealth Management LLC lifted its stake in Cheesecake Factory by 100.0% during the first quarter. Golden State Wealth Management LLC now owns 1,060 shares of the restaurant operator's stock worth $52,000 after purchasing an additional 530 shares in the last quarter. SBI Securities Co. Ltd. raised its stake in shares of Cheesecake Factory by 38.5% in the first quarter. SBI Securities Co. Ltd. now owns 1,244 shares of the restaurant operator's stock valued at $61,000 after acquiring an additional 346 shares in the last quarter. Finally, Bayforest Capital Ltd acquired a new stake in Cheesecake Factory in the first quarter valued at $72,000. Institutional investors own 94.48% of the company's stock.

Cheesecake Factory Stock Performance

The stock has a fifty day moving average of $60.87 and a 200-day moving average of $54.20. The stock has a market cap of $3.10 billion, a PE ratio of 19.22, a price-to-earnings-growth ratio of 1.72 and a beta of 1.16. The company has a quick ratio of 0.43, a current ratio of 0.53 and a debt-to-equity ratio of 1.85.

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.