Results: The Cheesecake Factory Incorporated Exceeded Expectations And The Consensus Has Updated Its Estimates

There's been a notable change in appetite for The Cheesecake Factory Incorporated (NASDAQ:CAKE) shares in the week since its quarterly report, with the stock down 11% to US$50.39. Cheesecake Factory reported US$907m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.66 beat expectations, being 8.9% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the latest results, Cheesecake Factory's 18 analysts are now forecasting revenues of US$3.93b in 2026. This would be a satisfactory 5.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 27% to US$4.10. In the lead-up to this report, the analysts had been modelling revenues of US$3.99b and earnings per share (EPS) of US$4.14 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

Check out our latest analysis for Cheesecake Factory

With no major changes to earnings forecasts, the consensus price target fell 7.4% to US$60.06, suggesting that the analysts might have previously been hoping for an earnings upgrade. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Cheesecake Factory at US$72.00 per share, while the most bearish prices it at US$48.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Cheesecake Factory's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 4.7% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. Factoring in the forecast slowdown in growth, it seems obvious that Cheesecake Factory is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Cheesecake Factory's revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Cheesecake Factory. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Cheesecake Factory going out to 2027, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 3 warning signs for Cheesecake Factory you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.