Cheesecake Factory (NASDAQ:CAKE) Stock Price Breaks Above 200-Day Moving Average - Should You Sell?

Key Points

• CAKE shares broke above their 200-day moving average, trading as high as $105.92 and last changing hands near $104.49, well above the $78.97 long-term average.
• Analysts maintain a consensus “Hold” rating with an average price target of $85.47, below the current share price; JPMorgan’s $105 target is the highest cited.
• The company exceeded quarterly earnings and revenue estimates, reported 7.7% year-over-year revenue growth, and pays a $0.30 quarterly dividend. However, insiders sold roughly $22.3 million of stock over the past 90 days.

The Cheesecake Factory Incorporated (NASDAQ:CAKE - Get Free Report) shares passed above its two hundred day moving average during trading on Friday. The stock has a two hundred day moving average of $78.97 and traded as high as $105.92. Cheesecake Factory shares last traded at $104.49, with a volume of 984,988 shares changing hands.

Analysts Set New Price Targets

A number of equities analysts have commented on CAKE shares. Morgan Stanley raised shares of Cheesecake Factory from an "underweight" rating to an "equal weight" rating and lifted their target price for the stock from $50.00 to $80.00 in a research note on Wednesday, July 29th. 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 report on Thursday, July 2nd. Robert W. Baird upgraded Cheesecake Factory to a "hold" rating in a report on Monday, August 24th. JPMorgan Chase & Co. increased their price objective on Cheesecake Factory from $92.00 to $105.00 and gave the stock a "neutral" rating in a research report on Wednesday, August 26th. Finally, Mizuho raised their target price on Cheesecake Factory from $85.00 to $93.00 and gave the stock a "neutral" rating in a research note on Wednesday, July 29th. One analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating, ten have issued a Hold rating and two have given a Sell rating to the company. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and a consensus price target of $85.47.

Cheesecake Factory Trading Down 0.5%

The company has a 50 day moving average of $103.66 and a 200-day moving average of $78.97. The stock has a market cap of $5.20 billion, a price-to-earnings ratio of 28.32, a price-to-earnings-growth ratio of 1.72 and a beta of 1.01. The company has a debt-to-equity ratio of 1.08, a quick ratio of 0.52 and a current ratio of 0.59.

Cheesecake Factory (NASDAQ:CAKE - Get Free Report) last released its earnings results on Tuesday, July 28th. The restaurant operator reported $1.44 earnings per share for the quarter, beating the consensus estimate of $1.18 by $0.26. The company had revenue of $1.03 billion during the quarter, compared to the consensus estimate of $999.54 million. Cheesecake Factory had a return on equity of 43.97% and a net margin of 4.61%.Cheesecake Factory's revenue was up 7.7% compared to the same quarter last year. During the same period in the previous year, the company posted $1.16 EPS. On average, research analysts anticipate that The Cheesecake Factory Incorporated will post 4.53 earnings per share for the current year.

Cheesecake Factory Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Tuesday, August 25th. Investors of record on Tuesday, August 11th were issued a $0.30 dividend. The ex-dividend date was Tuesday, August 11th. This represents a $1.20 dividend on an annualized basis and a dividend yield of 1.1%. Cheesecake Factory's payout ratio is 32.52%.

Insider Transactions at Cheesecake Factory

In related news, CFO Matthew Clark sold 68,900 shares of the company's stock in a transaction that occurred on Thursday, July 30th. The shares were sold at an average price of $99.30, for a total transaction of $6,841,770.00. Following the sale, the chief financial officer directly owned 45,109 shares of the company's stock, valued at $4,479,323.70. This represents a 60.43% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, EVP Scarlett May sold 7,978 shares of the stock in a transaction that occurred on Friday, July 31st. The stock was sold at an average price of $102.66, for a total transaction of $819,021.48. Following the sale, the executive vice president owned 18,241 shares in the company, valued at approximately $1,872,621.06. This trade represents a 30.43% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last ninety days, insiders have sold 213,749 shares of company stock valued at $22,301,899. 8.00% of the stock is owned by corporate insiders.

Institutional Trading of Cheesecake Factory

Several hedge funds have recently modified their holdings of the stock. Dimensional Fund Advisors LP increased its holdings in Cheesecake Factory by 2.4% during the 1st quarter. Dimensional Fund Advisors LP now owns 1,242,143 shares of the restaurant operator's stock worth $68,008,000 after purchasing an additional 29,037 shares during the period. Bank of New York Mellon Corp purchased a new position in shares of Cheesecake Factory in the 2nd quarter valued at about $38,020,000. Bamco Inc. NY acquired a new position in shares of Cheesecake Factory during the second quarter worth about $35,793,000. PDT Partners LLC acquired a new position in shares of Cheesecake Factory during the second quarter worth about $13,743,000. Finally, Palisade Capital Management LP acquired a new position in shares of Cheesecake Factory during the second quarter worth about $10,014,000. 94.48% of the stock is currently owned by institutional investors and hedge funds.

Cheesecake Factory Company Profile

The Cheesecake Factory Incorporated NASDAQ: CAKE operates full-service casual dining restaurants in the United States. Its flagship Cheesecake Factory restaurants offer an extensive menu of made-to-order dishes spanning American and international cuisines, along with a broad selection of cheesecakes and other desserts.

The company also operates North Italia, an Italian restaurant concept, and restaurants developed through Fox Restaurant Concepts. In addition, its bakery division produces cheesecakes and other baked goods for the company's restaurants, retailers, and other foodservice customers.

Founded in 1978 by David Overton, The Cheesecake Factory began as a bakery business before opening its first restaurant in Beverly Hills, California, in 1978.

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