Cheesecake Factory (NASDAQ:CAKE) Rating Lowered to Hold at Zacks Research

Cheesecake Factory (NASDAQ:CAKE) was downgraded by research analysts at Zacks Research from a “strong-buy” rating to a “hold” rating in a note issued to investors on Wednesday, Zacks reports.

Several other brokerages have also issued reports on CAKE. Citigroup decreased their price target on shares of Cheesecake Factory from $128.00 to $127.00 and set a “buy” rating for the company in a report on Wednesday. Freedom Capital raised Cheesecake Factory from a “hold” rating to a “strong-buy” rating in a research note on Wednesday. Wells Fargo & Company set a $116.00 target price on Cheesecake Factory in a report on Wednesday. UBS Group boosted their target price on Cheesecake Factory from $60.00 to $80.00 and gave the company a “sell” rating in a research note on Friday, October 23rd. Finally, Jefferies Financial Group downgraded Cheesecake Factory from a “buy” rating to a “hold” rating and increased their price target for the stock from $75.00 to $88.00 in a report on Wednesday, July 29th. One research 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 issued a Sell rating to the company. According to MarketBeat, the stock presently has an average rating of “Hold” and a consensus target price of $95.47.

Cheesecake Factory Stock Performance

CAKE stock opened at $113.12 on Wednesday. The stock has a market capitalization 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. The company has a debt-to-equity ratio of 1.08, a current ratio of 0.59 and a quick ratio of 0.52. The company has a 50 day moving average price of $107.90 and a 200 day moving average price of $79.42. Cheesecake Factory has a fifty-two week low of $43.07 and a fifty-two week high of $118.63.

Cheesecake Factory (NASDAQ:CAKE) last issued its earnings results on Tuesday, October 27th. The restaurant operator reported $1.02 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.96 by $0.06. Cheesecake Factory had a net margin of 5.20% and a return on equity of 46.95%. The company had revenue of $1.03 billion for the quarter, compared to analyst estimates of $1.01 billion. During the same quarter last year, the firm earned $0.66 EPS. The company’s revenue for the quarter was up 13.9% on a year-over-year basis. Analysts forecast that Cheesecake Factory will post 4.75 EPS for the current year.

Insider Transactions at Cheesecake Factory

In related news, President David Gordon sold 31,950 shares of Cheesecake Factory stock in a transaction that occurred on Monday, August 10th. The stock was sold at an average price of $110.03, for a total value of $3,515,458.50. Following the sale, the president owned 26,875 shares of the company’s stock, valued at approximately $2,957,056.25. This trade represents a 54.31% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, Director Janice L. Meyer sold 1,958 shares of the business’s stock in a transaction that occurred on Monday, August 17th. The shares were sold at an average price of $109.36, for a total value of $214,126.88. Following the completion of the sale, the director owned 21,251 shares in the company, valued at $2,324,009.36. The trade was a 8.44% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 131,176 shares of company stock worth $14,068,161 in the last 90 days. 8.00% of the stock is owned by corporate insiders.

Institutional Trading of Cheesecake Factory

A number of institutional investors have recently made changes to their positions in CAKE. Dimensional Fund Advisors LP grew its holdings in shares of Cheesecake Factory by 2.4% in the 1st quarter. Dimensional Fund Advisors LP now owns 1,242,143 shares of the restaurant operator’s stock valued at $68,008,000 after acquiring an additional 29,037 shares in the last quarter. Bank of New York Mellon Corp bought a new stake in Cheesecake Factory during the second quarter worth about $38,020,000. Bamco Inc. NY bought a new stake in Cheesecake Factory during the second quarter worth about $35,793,000. TD Waterhouse Canada Inc. acquired a new position in Cheesecake Factory during the third quarter valued at approximately $13,792,000. Finally, PDT Partners LLC bought a new position in Cheesecake Factory in the second quarter valued at approximately $13,743,000. Institutional investors own 94.48% of the company’s stock.

Key Headlines Impacting Cheesecake Factory

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.