One-glance verdict
Overvalued
$33.80 our estimate vs market $112.64
Wall Street consensus: $106.27 (214.4% higher than our fair-value estimate)
233% above our estimate, beyond the bull case
Fundamentals snapshot
The Cheesecake Factory Incorporated
CAKE · NMS · Consumer Cyclical · Restaurants
Current price
$112.64
52-week range
$43.07 - $118.63
Market cap
$5.61B
Balance sheet
Distressed
24.67x Strong cushion
Net debt $1.89B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 3.3% last year.
- Reward Free cash flow was positive in 9/10 years.
- Risk Stock trades 43.5% above its 5-year average P/E.
- Risk Net debt grew 10.9% over 3 years.
What this company does
The Cheesecake Factory Incorporated
The Cheesecake Factory operates restaurants and sells cheesecakes and other baked goods made in its bakeries. Its main money comes from selling food in its restaurants and also from selling its baked goods to other businesses like grocery stores and restaurants. This mix of sales helps the company manage its income because even if restaurant sales are slow, bakery sales can provide a steady stream of money.
How the company got here
The Cheesecake Factory Incorporated started in 1972 as a small bakery in Detroit, Michigan, founded by Evelyn and Oscar Overton. Their son, David Overton, opened the first Cheesecake Factory restaurant in Beverly Hills, California, in 1978, combining a bakery with a full-service dining experience. This unique concept, featuring an extensive menu and a wide variety of cheesecakes, quickly gained popularity. The company went public in 1992, allowing for further expansion across the United States and into international markets through company-owned locations and licensing agreements. Today, it operates a portfolio of restaurant brands and a significant bakery division.
What it actually does
The Cheesecake Factory Incorporated is primarily a restaurant company that operates a collection of dining establishments. It is most famous for its flagship brand, The Cheesecake Factory, known for its vast menu with over 250 items and an equally extensive selection of cheesecakes. Beyond dining, the company also operates bakeries that produce cheesecakes and other baked goods. These desserts are supplied to its own restaurants, international licensees, and also sold to external customers like retailers and foodservice operators.
The Cheesecake Factory Restaurants
This is the company's largest and most well-known business segment, accounting for the majority of its revenue. These are full-service restaurants offering a wide array of dishes, from appetizers and salads to entrees like pasta, seafood, and steaks, alongside their famous cheesecakes. Customers pay for the food and beverages they consume during their dining experience. The brand operates numerous locations across the United States and internationally.
North Italia
North Italia is another restaurant concept owned by The Cheesecake Factory Incorporated, representing a significant portion of its revenue. This segment focuses on a more specific culinary experience, offering Italian-inspired dishes. Customers dine in and pay for their meals, similar to the flagship brand. While smaller than The Cheesecake Factory brand, North Italia is a growing part of the company's portfolio.
Flower Child and other Fox Restaurant Concepts
The Cheesecake Factory Incorporated also operates the Flower Child brand and other concepts acquired through Fox Restaurant Concepts. Flower Child focuses on healthy, farm-to-table inspired dishes, appealing to a different customer base. These smaller concepts collectively form a smaller but distinct part of the company's overall business, offering diverse dining experiences and contributing to the company's multi-brand strategy.
Bakery Operations
This segment involves the production of cheesecakes and other baked goods from two large bakery facilities. These desserts are a core part of The Cheesecake Factory's identity and are supplied to its own restaurants. Additionally, the bakery sells its products to external customers, including other restaurants, retailers, and distributors, under various brand names. This division provides a revenue stream beyond direct restaurant sales and allows the company to leverage its baking expertise.
What management is betting on now
Management is focused on expanding its portfolio of restaurant brands, including The Cheesecake Factory, North Italia, and Flower Child, to cater to a wider range of tastes and dining occasions. They are also investing in operational excellence, leveraging data to improve decision-making and enhance the customer experience. The company continues to emphasize its strong brand identity and the quality of its extensive menu and desserts, aiming for consistent growth and profitability across all its business lines.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$-1.49M
FY2024 Q4
$25.66M
FY2025 Q2
$36.10M
FY2025 Q3
$15.29M
FY2025 Q4
$49.75M
FY2026 Q1
$53.35M
FY2026 Q2
$49.28M
Revenue
$1.03B
Net income
$68.39M
Diluted EPS
1.41
Operating cash flow
$92.21M
Free cash flow
$49.28M
Fetching…
Sources
Revenue
$978.83M
Net income
$49.55M
Diluted EPS
1.02
Operating cash flow
$96.72M
Free cash flow
$53.35M
Fetching…
Sources
Revenue
$961.56M
Net income
$28.77M
Diluted EPS
0.59
Operating cash flow
$74.91M
Free cash flow
$49.75M
Fetching…
Sources
Revenue
$955.83M
Net income
$54.81M
Diluted EPS
1.14
Operating cash flow
$56.84M
Free cash flow
$15.29M
Fetching…
Sources
Revenue
$927.20M
Net income
$32.94M
Diluted EPS
0.67
Operating cash flow
$78.92M
Free cash flow
$36.10M
Fetching…
Sources
Revenue
$865.47M
Net income
$29.99M
Diluted EPS
0.61
Operating cash flow
$79.88M
Free cash flow
$25.66M
Fetching…
Sources
Revenue
$904.04M
Net income
$52.44M
Diluted EPS
1.08
Operating cash flow
$27.70M
Free cash flow
$-1.49M
Fetching…
Sources
Is it cheap or expensive?
Fair value $33.80 vs current price $112.64
Wall Street consensus is the average analyst price target: $106.27 (214.4% higher than our fair-value estimate).
Our most-likely fair value is $33.80 a share — about 70.0% below today's price of $112.64, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Distressed
Net debt $1.9B. Interest coverage 24.7x.
Net debt
$1.89B
Interest coverage
24.67x
The Cheesecake Factory Incorporated's profit covers its interest bill about 24.7 times over. which is stronger than every peer shown here.
Distressed
Worse cushion
Baseline
Better cushion
CAKE
BASELINE
The Cheesecake Factory Incorporated
Total debt $2.08B Interest coverage 24.67x This is the baseline the peer rows are being compared against.
Total debt $1.69B Interest coverage 1.84x -93% vs CAKE Carries about 13.4x less debt cushion than CAKE.
What you should know
The case for and against CAKE
3 Rewards
2 Risks
Rewards
-
Revenue grew 3.3% last year.
-
Free cash flow was positive in 9/10 years.
-
Trades at 30.5x P/E vs peer median 58.2x (47.6% cheaper).
Risks
-
Stock trades 43.5% above its 5-year average P/E.
-
Net debt grew 10.9% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
30.53x
Forward P/E
21.65x
P/B
10.80x
P/S
1.40x
EV/EBITDA
19.63x
PEG ratio
1.52x
Profitability
How much profit each dollar creates
Gross margin
41.1%
Operating margin
6.0%
Net margin
5.2%
ROE
—
ROA
—
Health
Liquidity and balance-sheet strength
Debt / equity
4.01x
Current ratio
—
Quick ratio
—
Total debt
$2.08B
Total cash
$195.17M
Growth
How the business has been compounding
Revenue TTM
$3.88B
Revenue 5Y CAGR
15.6%
EPS TTM
3.69
EPS 5Y CAGR
52.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$354.45M
Free CF TTM
$155.08M
FCF margin
4.0%
Dividend
Shareholder payout
Yield
1.1%
Payout ratio
30.9%
Last ex-div date
2026-11-10