NasdaqGS:CAKE

Stock Analysis Report

Executive Summary

The Cheesecake Factory Incorporated engages in the operation of restaurants.

Snowflake

Fundamentals

Mediocre balance sheet second-rate dividend payer.


Similar Companies

Share Price & News

How has Cheesecake Factory's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CAKE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.1%

CAKE

0.03%

US Hospitality

0.4%

US Market


1 Year Return

-16.3%

CAKE

8.9%

US Hospitality

13.1%

US Market

Return vs Industry: CAKE underperformed the US Hospitality industry which returned 8.9% over the past year.

Return vs Market: CAKE underperformed the US Market which returned 13.1% over the past year.


Shareholder returns

CAKEIndustryMarket
7 Day-1.1%0.03%0.4%
30 Day12.4%3.7%4.0%
90 Day17.7%6.0%7.4%
1 Year-13.7%-16.3%11.8%8.9%15.6%13.1%
3 Year-19.0%-25.0%35.4%25.9%48.2%38.6%
5 Year2.0%-8.5%35.5%20.9%62.6%44.6%

Price Volatility Vs. Market

How volatile is Cheesecake Factory's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Cheesecake Factory undervalued compared to its fair value and its price relative to the market?

19.91x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CAKE ($42.66) is trading above our estimate of fair value ($19.67)

Significantly Below Fair Value: CAKE is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CAKE is good value based on its PE Ratio (19.9x) compared to the Hospitality industry average (22.2x).

PE vs Market: CAKE is poor value based on its PE Ratio (19.9x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: CAKE is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: CAKE is overvalued based on its PB Ratio (3.6x) compared to the US Hospitality industry average (2.3x).


Next Steps

Future Growth

How is Cheesecake Factory forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

12.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CAKE's forecast earnings growth (12.3% per year) is above the savings rate (2.7%).

Earnings vs Market: CAKE's earnings (12.3% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: CAKE's earnings are forecast to grow, but not significantly.

Revenue vs Market: CAKE's revenue (13% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: CAKE's revenue (13% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CAKE's Return on Equity is forecast to be low in 3 years time (18.3%).


Next Steps

Past Performance

How has Cheesecake Factory performed over the past 5 years?

1.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CAKE has high quality earnings.

Growing Profit Margin: CAKE's current net profit margins (4%) are lower than last year (6.1%).


Past Earnings Growth Analysis

Earnings Trend: CAKE's earnings have grown by 1% per year over the past 5 years.

Accelerating Growth: CAKE's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CAKE had negative earnings growth (-32.6%) over the past year, making it difficult to compare to the Hospitality industry average (-15%).


Return on Equity

High ROE: CAKE's Return on Equity (17.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cheesecake Factory's financial position?


Financial Position Analysis

Short Term Liabilities: CAKE's short term assets ($449.1M) exceeds its short term liabilities ($433.8M)

Long Term Liabilities: CAKE's short term assets (449.1M) do not cover its long term liabilities (1.4B)


Debt to Equity History and Analysis

Debt Level: CAKE's debt to equity ratio (62.8%) is considered high

Reducing Debt: CAKE's debt to equity ratio has increased from 19.3% to 62.8% over the past 5 years.

Debt Coverage: CAKE's debt is well covered by operating cash flow (67.3%).

Interest Coverage: CAKE's interest payments on its debt are well covered by EBIT (79.3x coverage).


Balance Sheet

Inventory Level: CAKE has a high level of physical assets or inventory.

Debt Coverage by Assets: CAKE's debt is covered by short term assets (assets are 1.3x debt).


Next Steps

Dividend

What is Cheesecake Factory's current dividend yield, its reliability and sustainability?

3.38%

Current Dividend Yield


Dividend Yield vs Market

company3.4%marketbottom25%1.4%markettop25%3.7%industryaverage3.1%forecastin3Years3.5%

Current dividend yield vs market & industry

Notable Dividend: CAKE's dividend (3.38%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: CAKE's dividend (3.38%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, CAKE has been paying a dividend for less than 10 years.

Growing Dividend: CAKE's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (63%), CAKE's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CAKE's dividends in 3 years are forecast to be covered by earnings (52.7% payout ratio).


Next Steps

Management

What is the CEO of Cheesecake Factory's salary, the management and board of directors tenure and is there insider trading?

7.5yrs

Average management tenure


CEO

David Overton (73yo)

27.8yrs

Tenure

US$6,267,151

Compensation

Mr. David M. Overton Founded Grand Lux Cafe, LLC in 1999. Mr. Overton Co-founded The Cheesecake Factory Incorporated's predecessor company in 1972. He has been Chairman and Chief Executive Officer of Chees ...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD6.27M) is above average for companies of similar size in the US market ($USD3.98M).

Compensation vs Earnings: David's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

7.5yrs

Average Tenure

53.5yo

Average Age

Experienced Management: CAKE's management team is seasoned and experienced (7.5 years average tenure).


Board Age and Tenure

8.4yrs

Average Tenure

73yo

Average Age

Experienced Board: CAKE's board of directors are considered experienced (8.4 years average tenure).


Insider Trading

Insider Buying: CAKE insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$32,87207 Nov 19
Edie Ames
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares760
Max PriceUS$43.25
BuyUS$97,58914 Aug 19
Laurence Mindel
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,500
Max PriceUS$39.04
BuyUS$31,63508 Aug 19
Edie Ames
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares750
Max PriceUS$42.18
BuyUS$95,00016 May 19
Laurence Mindel
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,000
Max PriceUS$47.50
BuyUS$33,02613 May 19
Edie Ames
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares700
Max PriceUS$47.18
BuyUS$74,46107 May 19
Laurence Mindel
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,500
Max PriceUS$49.64
SellUS$46,36013 Mar 19
Cheryl Slomann
EntityIndividual
Role
Chief Accounting Officer
Chief Accounting Officer
Shares1,000
Max PriceUS$46.36
BuyUS$5,85312 Mar 19
Alexander Cappello
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares126
Max PriceUS$46.45
SellUS$4,935,69604 Mar 19
David Overton
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares103,400
Max PriceUS$47.73
BuyUS$9,50227 Feb 19
David Pittaway
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares200
Max PriceUS$47.51
BuyUS$46,97027 Feb 19
Edie Ames
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$46.97

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • David Overton (73yo)

    Chairman & CEO

    • Tenure: 27.8yrs
    • Compensation: US$6.27m
  • Cheryl Slomann (53yo)

    Chief Accounting Officer

    • Tenure: 14.8yrs
    • Compensation: US$387.59k
  • Scarlett May (53yo)

    Executive VP

    • Tenure: 1.5yrs
    • Compensation: US$1.36m
  • Donald Moore

    Chief Culinary Officer & Executive VP

    • Tenure: 0yrs
  • David Gordon (54yo)

    President

    • Tenure: 6.8yrs
    • Compensation: US$2.08m
  • Matt Clark (49yo)

    Executive VP & CFO

    • Tenure: 2.3yrs
    • Compensation: US$1.69m
  • Dina Barmasse-Gray

    Senior Vice President of Human Resources

    • Tenure: 9.8yrs
  • Donald Evans

    Chief Marketing Officer & Senior VP

    • Tenure: 8.3yrs
  • Keith Carango (57yo)

    President of The Cheesecake Factory Bakery Incorporated

    • Tenure: 1.6yrs
    • Compensation: US$1.03m
  • Shaw Feit

    Vice President of Investor Relations

    • Tenure: 0yrs

Board Members

  • David Pittaway (67yo)

    Independent Director

    • Tenure: 10.5yrs
    • Compensation: US$210.00k
  • Herb Simon (84yo)

    Independent Director

    • Tenure: 8.4yrs
    • Compensation: US$195.00k
  • Larry Mindel (81yo)

    Independent Director

    • Tenure: 7.7yrs
    • Compensation: US$195.00k
  • David Overton (73yo)

    Chairman & CEO

    • Tenure: 27.8yrs
    • Compensation: US$6.27m
  • Jerome Kransdorf (80yo)

    Lead Director

    • Tenure: 7.7yrs
    • Compensation: US$227.50k
  • Alex Cappello (63yo)

    Independent Director

    • Tenure: 11.8yrs
    • Compensation: US$207.50k
  • Edie Ames (52yo)

    Independent Director

    • Tenure: 2.9yrs
    • Compensation: US$195.00k

Company Information

The Cheesecake Factory Incorporated's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Cheesecake Factory Incorporated
  • Ticker: CAKE
  • Exchange: NasdaqGS
  • Founded: 1972
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: US$1.904b
  • Shares outstanding: 44.63m
  • Website: https://www.thecheesecakefactory.com

Number of Employees


Location

  • The Cheesecake Factory Incorporated
  • 26901 Malibu Hills Road
  • Calabasas Hills
  • Calabasas
  • California
  • 91301
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CAKENasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDSep 1992
CF2DB (Deutsche Boerse AG)YesCommon StockDEEURSep 1992

Biography

The Cheesecake Factory Incorporated engages in the operation of restaurants. The company produces cheesecakes and other baked products for own restaurants and international licensees, as well as external f ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/13 23:33
End of Day Share Price2019/11/13 00:00
Earnings2019/10/01
Annual Earnings2019/01/01


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.