Why Cheesecake Factory's Growth Hasn't Translated Into Stock Appreciation

Caffital Research
1.62K Followers

Summary

  • CAKE operates multiple restaurant concepts, and continues to grow its locations with alternative concepts in addition to The Cheesecake Factory brand.
  • The stock has appreciated poorly despite good revenue growth, as margins have performed poorly.
  • The current valuation doesn't provide a good risk-to-reward in my opinion, and I see the stock as a weak investment unless clear improvements are made.
Cheesecake Factory sign

ElsvanderGun

The Cheesecake Factory (NASDAQ:CAKE) operates restaurants under brands such as The Cheesecake Factory, North Italia, and Fox Restaurant Concepts, operating several restaurant concepts such as Grand Lux Café, Blanco, and Culinary Dropout. The company has 331 restaurants across North America under the brands and several

This article was written by

1.62K Followers
I am an avid investor with a major focus on small cap companies with experience in investing in US, Canadian, and European markets. My investment philosophy to generating great returns on the stock market revolves around identifying mispriced securities by understanding the drivers behind a company's financials, and ultimately, most often revealed by a DCF model valuation. This methodology doesn't limit an investor into rigid traditional value, dividend, or growth investing, but rather accounts for all of a stock's prospects to determine the risk-to-reward.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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