Cheesecake Factory (NASDAQ:CAKE) Shareholders Have Enjoyed A 88% Share Price Gain

By
Simply Wall St
Published
July 30, 2021
NasdaqGS:CAKE
Source: Shutterstock

While The Cheesecake Factory Incorporated (NASDAQ:CAKE) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 24% in the last quarter. But that doesn't change the fact that the returns over the last year have been pleasing. After all, the share price is up a market-beating 88% in that time.

View our latest analysis for Cheesecake Factory

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Cheesecake Factory was able to grow EPS by 62% in the last twelve months. Though we do note extraordinary items affected the bottom line. This EPS growth is significantly lower than the 88% increase in the share price. This indicates that the market is now more optimistic about the stock.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

earnings-per-share-growth
NasdaqGS:CAKE Earnings Per Share Growth July 30th 2021

We know that Cheesecake Factory has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

A Different Perspective

We're pleased to report that Cheesecake Factory shareholders have received a total shareholder return of 88% over one year. That's better than the annualised return of 1.0% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Cheesecake Factory better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Cheesecake Factory , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.