Cheesecake Factory Incorporated (The) Common Stock (CAKE)

FairStock Score: 39/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for a business I can understand, bought with a margin of safety. The Cheesecake Factory is understandable: restaurants and bakeries, with $3.8B of fiscal 2025 revenue, $148.4M of net income and $3.06 diluted EPS. The latest filed quarter, fiscal Q2 2026 ended 2026-06-30, was better: revenue $1.0B, net income $68.4M and EPS $1.41, versus fiscal Q2 2025 revenue $955.8M, net income $54.8M and EPS $1.14. That is real momentum, and trailing free cash flow of $205.2M is respectable. But I part ways with Mr. Market on price. At the 2026-10-26 close of $110.13, FairStock calculates a P/E of 29.85, P/B of 10.56 and EV/EBITDA of 22.82. Its Graham Number is $29.43, leaving a negative 268.23% margin of safety. Debt/equity of 4.01 is heavy; ROE of 38.83% is flattered by leverage, while ROCE is only 4.70%. I would want more evidence that returns on capital improve before paying a premium. Piotroski 8/9 is a good sign, and Altman Z 2.10 is not distressed but not fortress-like. FairStock's Lynch category is STALWART: steady growth with profit up 19.7% a year over four years and revenue up 6.4%. That deserves respect, but FY2025 net income of $148.4M and EPS of $3.06 were below FY2024's $156.8M and $3.20. Good business, demanding price.

In plain English: The Cheesecake Factory runs restaurants and bakeries. In fiscal Q2 2026, the quarter ended 2026-06-30, sales and profit grew from fiscal Q2 2025, and the business generates cash after running and investing, but it owes a lot compared with its net worth. At the 2026-10-26 close of $110.13, the price looks expensive versus reported earnings and accounting value.

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Data as of 2026-10-26 close · note generated 2026-10-28 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-07-01) · FY2025 10-K (period ended 2025-12-30) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2024-01-02)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer