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what it is
It runs 352 full-service restaurants, licenses 34 more overseas, and sells cheesecake from two bakery facilities.
how it gets paid
Last year Cheesecake Factory made $3.8B in revenue. The Cheesecake Factory restaurants was the main engine at $2.95B, or 78% of sales.
why it's growing
Revenue grew 4.7% last year. The business is still growing, with annual revenue up 4.7% and management pushing new openings.
what just happened
CAKE posted EPS of $1.00, below the $1.10 consensus, even as annual revenue reached $3.8B.
At a glance
B+ balance sheet — decent shape, but not bulletproof
15/100 earnings predictability — expect surprises
15.0x trailing p/e — the market's not buying it — or you found a deal
2.0% dividend yield — cash in your pocket every quarter
20.0% return on capital — nothing to write home about
xvary composite: 53/100 — below average
What they do
It runs 352 full-service restaurants, licenses 34 more overseas, and sells cheesecake from two bakery facilities.
You are not buying a trend. You are buying a scaled dine-in machine with 352 restaurants, 34 licensed international units, and two bakery facilities feeding about 60 dessert varieties. Scale → more purchasing power and shared overhead → so what: a 9.5% operating margin and 20.0% return on capital are unusually solid for a sit-down chain.
How they make money
$3.8B
annual revenue · their business grew +4.7% last year
The Cheesecake Factory restaurants
$2.95B
+2.0%
North Italia
$0.36B
+10.4%
Flower Child and other FRC brands
$0.33B
+10.4%
Bakery and other sales
$0.12B
+4.7%
Licensing and international royalties
$0.04B
+4.7%
The products that matter
full-service restaurant operations
company-operated restaurants
$3.8B revenue
this is the core story: $3.8B in annual sales growing 4.7% from last year. if traffic slips, you feel it fast.
core driver
brand portfolio across concepts
restaurant brands
352 locations
352 restaurants give the company scale in purchasing and marketing, but this page does not break out sales by concept. that tells you the owned restaurant base is still the main thing that matters.
scale matters
shareholder payout stream
dividend
2.0% yield
the 2.0% yield adds some cash return, but not enough to carry the stock if operating results wobble. you still need the restaurants to perform.
supporting role
Key numbers
15.0x
trailing p/e
P/E → price versus yearly profit → so what: you are paying 15 times trailing earnings for a chain expected to grow EPS from $3.90 in 2025 to $4.45 by 2027.
20.0%
return on capital
Return on capital → profit produced from money put into the business → so what: CAKE is getting $0.20 back for every $1 invested, which is strong for full-service dining.
9.5%
operating margin
Operating margin → what is left after running the business → so what: this is the cushion that protects earnings when traffic gets shaky.
2.0%
dividend yield
Dividend yield → cash paid back to you each year as a share of stock price → so what: you are getting paid something while waiting for unit growth to work.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 35 / 100
- long-term debt $560M (16% of capital)
- net profit margin 5.8% — keeps 6 cents of every dollar in revenue
- return on equity 40% — $0.40 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in CAKE 3 years ago → it's now worth $15,740.
The index would have given you $13,880.
source: institutional data · total return
What just happened
missed estimates
CAKE posted EPS of $1.00, below the $1.10 consensus, even as annual revenue reached $3.8B.
The business is still growing, with annual revenue up 4.7% and management pushing new openings. But the latest quarter showed the usual restaurant problem: sales growth is fine until traffic and margin timing get weird.
$2.8B
revenue
$1.00
eps
n/a
n/a
the number that mattered
The key number was the 2.2% decline in comparable Cheesecake Factory sales in Q4 2025, because mature stores are supposed to fund the rest of the growth story.
-
the shares of cheesecake fact ory have rebounded of late.
-
the stock has climbed by over 20% in value since our most recent report.the mid-november update included a discussion of third-quarter results, which we consider decent overall. (note that the company was scheduled to post key year-end results as this report was going to press.) there has been little company-specific news to drive the stock's climb that's extended into early 2026. instead, it seems likely that the shares are benefiting from renewed optimism about broader discretionary spending, and what that might mean for results at the casual dining chain in the year just begun.
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cheesecake factory continues to implement a well-balanced growth strategy.our view about the company's steady long-term growth prospects mainly reflects the strength at flagship cheesecake factory restaurants. we forecast comparable sales growth at these mostly corporate-owned units through 2029-2031 will trend around the low single digits from the past few years. given their sizable average unit volumes (estimated at about $12 million to $13 million each in 2025), the modest sales advances we forecast for these flagship restaurants are the primary driver of overall growth at the company.
-
leverage there should continue to drive annual increases of up to 25 basis points in the overall operating margin and help ensure the net profit margin stays above 5% (versus around 3% from 2021-2023).the significant cash flows from cheesecake factory units ought to remain the primary funding source for expansion of the company's emerging brands.
-
indeed, continued double-digit annual additions to these roughly 150 newer units (e.g.
source: company earnings report, 2026
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What could go wrong
the top risk is traffic softening in an optional dining category.
med
consumer pullback hits all $3.8B of revenue
this is a restaurant business. if guests eat out less, there is no software margin to save you.
all $3.8B of annual sales depend on people choosing to dine out, and the stock already carries only a 35/100 price stability score.
med
small margin moves have a real dollar cost
food, labor, and occupancy costs do not need to explode to hurt you. they only need to creep higher.
a one-point margin move on $3.8B of revenue is about $38M. that is the catch with a 5.3% net margin business.
med
execution noise stays part of the story
352 restaurants mean a lot of moving parts, and the earnings predictability score sits at 15/100 for a reason.
if results get lumpier, a 15.0x earnings multiple does not look cheap anymore. it looks correctly skeptical.
if traffic cools and margins slip at the same time, you are not talking about a small annoyance. you are talking about pressure on the full $3.8B revenue base and the roughly $200M profit pool implied by the current margin.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
sales growth holding above zero
revenue grew 4.7% last year. if that flips negative, the "cheap enough" case gets weaker fast.
risk
net margin around 5.3%
restaurants live on thin margins. if this slips under 5%, that is not noise. that is earnings pressure.
calendar
next earnings print
the last quarter beat with $1.25 EPS on $0.9B of revenue. you want another clean quarter, not a one-off.
trend
institutional selling streak
155 buyers versus 162 sellers in 3q2025 is a small gap, but two net-sell quarters in a row still deserve your attention.
Analyst rankings
short-term outlook
average
momentum score 3. in human-speak, analysts do not see a strong edge in the next few quarters.
risk profile
average
stability score 3 means this sits near the middle of the pack on risk — not defensive, not reckless.
chart momentum
average
technical score 3 says the chart is behaving like a normal stock, not a runaway trend.
earnings predictability
15 / 100
15/100 means quarterly results are harder to model than the multiple suggests. that is why beats matter so much here.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 155 buyers vs. 162 sellers in 3q2025. total institutional holdings: 56.9M shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$45
$97
$59
current price
$71
target midpoint · +21% from current · 3-5yr high: $85 (+45% · 11% ann'l return)
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