Cheesecake Factory (NASDAQ:CAKE) Reaches New 12-Month High – Time to Buy?

Shares of The Cheesecake Factory Incorporated (NASDAQ:CAKE) reached a new 52-week high during trading on Monday . The stock traded as high as $103.36 and last traded at $104.32, with a volume of 116942 shares. The stock had previously closed at $101.42.

Key Stories Impacting Cheesecake Factory

Here are the key news stories impacting Cheesecake Factory this week:

• Positive Sentiment: Strong earnings and revenue growth: Recent quarterly results showed adjusted earnings of $1.44 per share, well above the $1.18 analyst consensus, while revenue reached $1.03 billion, up 7.7% year over year and ahead of estimates. Coverage also pointed to raised guidance, reinforcing the bullish reaction to the report. A Sweet Beat and a Wearables Rally Came With Reasons to Pause
• Positive Sentiment: Momentum and estimate revisions: Zacks identified CAKE among stocks with strong relative price strength, positive earnings-estimate revisions and solid fundamentals. Another Zacks analysis cited the company’s growth characteristics as potential drivers of continued market outperformance. 5 Stocks With Relative Price Strength Investors Should Buy
• Neutral Sentiment: Mixed analyst outlook: Argus raised its price target to $110 and maintained a buy view, but several firms remain neutral. The average analyst target of about $81 is below the stock’s recent trading level, suggesting expectations are already elevated. Cheesecake Factory Analyst Ratings
• Negative Sentiment: Insider selling adds caution: Director Alexander Cappello sold a combined 2,354 shares in late July and early August, while EVP Scarlett May sold 7,978 shares valued at roughly $819,000. The sales followed CAKE’s sharp rally and may raise questions about valuation, although they do not necessarily signal deteriorating operations. Cheesecake Factory Insiders Make Bold Moves With Fresh Stock Sales
• Negative Sentiment: Rally sustainability concerns: Analysts cautioned that non-recurring benefits and margin pressure could make recent earnings gains less durable. With the stock’s price-to-earnings ratio near 29, disappointment in future margins or growth could create downside risk. A Sweet Beat and a Wearables Rally Came With Reasons to Pause

Analyst Upgrades and Downgrades

CAKE has been the subject of a number of research reports. Wells Fargo & Company upped their price objective on shares of Cheesecake Factory from $65.00 to $75.00 and gave the company an “equal weight” rating in a research note on Thursday, July 16th. Morgan Stanley upgraded 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 report on Wednesday, July 29th. Barclays boosted their price target on shares of Cheesecake Factory from $58.00 to $60.00 and gave the stock an “underweight” rating in a research note on Thursday, April 30th. Bank of America upped 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. Finally, Northcoast Research cut Cheesecake Factory from a “buy” rating to a “neutral” rating in a research note on Monday, June 15th. One investment analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating, ten have assigned 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 an average price target of $81.00.

Cheesecake Factory Stock Up 0.9%

The stock has a market cap of $5.26 billion, a P/E ratio of 28.68, a P/E/G ratio of 1.90 and a beta of 1.00. The company has a quick ratio of 0.53, a current ratio of 0.59 and a debt-to-equity ratio of 1.22. The company has a 50-day simple moving average of $79.29 and a two-hundred day simple moving average of $66.84.

Cheesecake Factory (NASDAQ:CAKE) last issued its earnings results on Tuesday, July 28th. The restaurant operator reported $1.44 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.18 by $0.26. Cheesecake Factory had a net margin of 4.61% and a return on equity of 45.94%. The firm had revenue of $1.03 billion for the quarter, compared to analysts’ expectations of $999.54 million. During the same quarter last year, the business earned $1.16 earnings per share. The business’s revenue was up 7.7% on a year-over-year basis. On average, equities analysts forecast that The Cheesecake Factory Incorporated will post 4.43 EPS for the current year.

Cheesecake Factory Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Tuesday, August 25th. Shareholders of record on Tuesday, August 11th will be issued a $0.30 dividend. This represents a $1.20 dividend on an annualized basis and a yield of 1.1%. The ex-dividend date of this dividend is Tuesday, August 11th. Cheesecake Factory’s dividend payout ratio (DPR) is 32.52%.

Insider Activity

In other news, insider Ashley W. Hanscom sold 3,500 shares of the company’s stock in a transaction dated Thursday, July 30th. The shares were sold at an average price of $100.00, for a total transaction of $350,000.00. Following the completion of the transaction, the insider directly owned 7,541 shares of the company’s stock, valued at approximately $754,100. This represents a 31.70% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. Also, CFO Matthew Eliot Clark sold 68,900 shares of the stock in a transaction dated Thursday, July 30th. The stock was sold at an average price of $99.30, for a total transaction of $6,841,770.00. Following the sale, the chief financial officer owned 45,109 shares of the company’s stock, valued at approximately $4,479,323.70. This represents a 60.43% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 85,122 shares of company stock worth $8,401,487 over the last ninety days. 8.00% of the stock is owned by insiders.

Institutional Investors Weigh In On Cheesecake Factory

Several institutional investors and hedge funds have recently bought and sold shares of the business. Allspring Global Investments Holdings LLC raised its holdings in shares of Cheesecake Factory by 183.6% during the fourth quarter. Allspring Global Investments Holdings LLC now owns 133,921 shares of the restaurant operator’s stock valued at $7,072,000 after acquiring an additional 86,705 shares in the last quarter. Fisher Asset Management LLC lifted its stake in Cheesecake Factory by 7.2% in the fourth quarter. Fisher Asset Management LLC now owns 503,184 shares of the restaurant operator’s stock worth $25,401,000 after acquiring an additional 33,959 shares during the period. Louisiana State Employees Retirement System bought a new stake in Cheesecake Factory in the first quarter valued at $1,111,000. SG Americas Securities LLC boosted its holdings in Cheesecake Factory by 140.8% in the fourth quarter. SG Americas Securities LLC now owns 26,064 shares of the restaurant operator’s stock valued at $1,316,000 after acquiring an additional 15,242 shares in the last quarter. Finally, Intech Investment Management LLC increased its position in Cheesecake Factory by 127.7% during the 4th quarter. Intech Investment Management LLC now owns 60,513 shares of the restaurant operator’s stock valued at $3,055,000 after purchasing an additional 33,936 shares during the period. Hedge funds and other 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.