Today Cheesecake Factory (CAKE) Hits New Lifetime High

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Cheesecake Factory ( CAKE) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Cheesecake Factory as such a stock due to the following factors:

  • CAKE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $26.5 million.
  • CAKE has traded 27,867 shares today.
  • CAKE is trading at a new lifetime high.

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More details on CAKE:

The Cheesecake Factory Incorporated owns and operates casual dining and full-service restaurants. The stock currently has a dividend yield of 1.3%. CAKE has a PE ratio of 23.7. Currently there are 5 analysts that rate Cheesecake Factory a buy, 1 analyst rates it a sell, and 12 rate it a hold.

The average volume for Cheesecake Factory has been 751,800 shares per day over the past 30 days. Cheesecake Factory has a market cap of $2.4 billion and is part of the services sector and leisure industry. The stock has a beta of 0.63 and a short float of 11.6% with 10.12 days to cover. Shares are up 2.5% year-to-date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cheesecake Factory as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.5%. Since the same quarter one year prior, revenues slightly increased by 6.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • CAKE's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.31 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, CHEESECAKE FACTORY INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • CHEESECAKE FACTORY INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CHEESECAKE FACTORY INC increased its bottom line by earning $2.11 versus $1.78 in the prior year. For the next year, the market is expecting a contraction of 0.9% in earnings ($2.09 versus $2.11).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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