The Cheesecake Factory: Earnings Growth Is Underappreciated

Gary Alexander
31.2K Followers
(10min)

Summary

  • The Cheesecake Factory is an attractive investment for 2025, offering a ~2% dividend yield and trading at a below-market valuation.
  • The company recently increased prices without denting low single-digit comparable sales growth. In turn, the company's net profit margins have nearly doubled.
  • The company has a diversified restaurant portfolio, with other brands including Flower Child and North Italia alongside a handful of boutique restaurants.
  • Trading at a 13.6x forward P/E ratio, the stock trades well below the S&P 500 as well as many of its restaurant peers. It also offers a ~2% dividend yield.
Cheesecake Factory sign

ElsvanderGun

As we navigate through an initially rocky start to 2025, I continue to keep my eyes peeled for growth stocks that still have room from a valuation standpoint to rise higher. In the restaurant industry, much of 2024 was dominated by the roughly

This article was written by

31.2K Followers
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of CAKE either through stock ownership, options, or other derivatives. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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