Assessing Cheesecake Factory: Insights From 11 Financial Analysts

In the preceding three months, 11 analysts have released ratings for Cheesecake Factory CAKE, presenting a wide array of perspectives from bullish to bearish.

The table below summarizes their recent ratings, showcasing the evolving sentiments within the past 30 days and comparing them to the preceding months.

Analysts have recently evaluated Cheesecake Factory and provided 12-month price targets. The average target is $31.45, accompanied by a high estimate of $35.00 and a low estimate of $26.00. A negative shift in sentiment is evident as analysts have decreased the average price target by 7.5%.

Deciphering Analyst Ratings: An In-Depth Analysis

The analysis of recent analyst actions sheds light on the perception of Cheesecake Factory by financial experts. The following summary presents key analysts, their recent evaluations, and adjustments to ratings and price targets.

Key Insights:

• Action Taken: Analysts respond to changes in market conditions and company performance, frequently updating their recommendations. Whether they 'Maintain', 'Raise' or 'Lower' their stance, it reflects their reaction to recent developments related to Cheesecake Factory. This information offers a snapshot of how analysts perceive the current state of the company.
• Rating: Analysts unravel qualitative evaluations for stocks, ranging from 'Outperform' to 'Underperform'. These ratings offer insights into expectations for the relative performance of Cheesecake Factory compared to the broader market.
• Price Targets: Delving into movements, analysts provide estimates for the future value of Cheesecake Factory's stock. This analysis reveals shifts in analysts' expectations over time.

Assessing these analyst evaluations alongside crucial financial indicators can provide a comprehensive overview of Cheesecake Factory's market position. Stay informed and make well-judged decisions with the assistance of our Ratings Table.

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Unveiling the Story Behind Cheesecake Factory

Cheesecake Factory owns and operates restaurants in the United States and Canada under brands that include The Cheesecake Factory, North Italia, and a collection within the Fox Restaurants Concepts subsidiary. The company's international presence, in the Middle East and Mexico, is through licensing agreements with third parties. The company also has a bakery division that produces cheesecakes and other baked products for sale in its restaurants, international licensees, and third-party bakery customers. The company has four operating business segments: The Cheesecake Factory restaurants, North Italia, other FRC, and Flower Child. Majority of the company's revenue comes from The Cheesecake Factory restaurants segment.

Financial Insights: Cheesecake Factory

Market Capitalization Analysis: The company exhibits a lower market capitalization profile, positioning itself below industry averages. This suggests a smaller scale relative to peers.

Revenue Growth: Cheesecake Factory's remarkable performance in 3 months is evident. As of 30 September, 2023, the company achieved an impressive revenue growth rate of 5.89%. This signifies a substantial increase in the company's top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Consumer Discretionary sector.

Net Margin: Cheesecake Factory's net margin lags behind industry averages, suggesting challenges in maintaining strong profitability. With a net margin of 2.16%, the company may face hurdles in effective cost management.

Return on Equity (ROE): The company's ROE is a standout performer, exceeding industry averages. With an impressive ROE of 5.54%, the company showcases effective utilization of equity capital.

Return on Assets (ROA): Cheesecake Factory's ROA lags behind industry averages, suggesting challenges in maximizing returns from its assets. With an ROA of 0.65%, the company may face hurdles in achieving optimal financial performance.

Debt Management: Cheesecake Factory's debt-to-equity ratio surpasses industry norms, standing at 5.79. This suggests the company carries a substantial amount of debt, posing potential financial challenges.

Understanding the Relevance of Analyst Ratings

Ratings come from analysts, or specialists within banking and financial systems that report for specific stocks or defined sectors (typically once per quarter for each stock). Analysts usually derive their information from company conference calls and meetings, financial statements, and conversations with important insiders to reach their decisions.

Analysts may supplement their ratings with predictions for metrics like growth estimates, earnings, and revenue, offering investors a more comprehensive outlook. However, investors should be mindful that analysts, like any human, can have subjective perspectives influencing their forecasts.

This article was generated by Benzinga's automated content engine and reviewed by an editor.