The Cheesecake Factory Incorporated (CAKE): A Bull Case Theory

We came crossed a bullish thesis on The Cheesecake Factory Incorporated on Stock Picker's Journey’s Substack by Gregg Jahnke. In this article, we volition summarize the bulls’ thesis on CAKE. The Cheesecake Factory Incorporated's share was trading astatine $49.15 as of December 16th. CAKE’s trailing and forward P/E were 14.94 and 12.29 respectively according to Yahoo Finance.

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The Cheesecake Factory Incorporated operates and licenses restaurants successful the United States and Canada. CAKE, led by founder’s lad David Overton, has navigated a challenging edifice manufacture successfully implicit the past decade, yet its banal has underperformed the S&P 500 by nearly 300%, largely owed to excessive valuations a decennary agone erstwhile it was a favorite among maturation investors.

Despite this, CAKE remains an understandable and well-run business, making it appealing successful a mid-cap worth portfolio wherever astatine slightest 1 edifice banal is often warranted. The institution is projected to gain $4.00 per stock successful 2026 and conservatively $5.00 by 2030; applying a 15x aggregate suggests a imaginable people of $75, modestly supra its existent $50 banal price, with a 2% dividend yield.

While upside whitethorn beryllium constricted nether basal assumptions, the communicative carries low risk: nett indebtedness is lone astir 1x EBITDA, and the banal trades adjacent the midpoint of its $30–$70 range. Analyst sentiment is tepid, with 9 buys, 7 holds, and 4 sells, reflecting marketplace caution. A cardinal imaginable misperception lies successful CAKE’s incubator brands, North Italia and Flower Child, which person not yet delivered standout show but could astonishment if 1 gains traction.

Off-premises sales, driven by DoorDash, relationship for 21% of revenue, and dessert sales remain steady astatine 17%, portion the caller Bites and Bowls paper shows promising adoption. Founder Overton retains about 5% ownership, and worth capitalist Ron Baron holds 2.5%, suggesting alignment with semipermanent shareholders. Overall, CAKE offers a stable, understandable concern with humble maturation potential, constricted downside, and a latent upside catalyst successful its incubator concepts, making it a cautious yet intriguing information for investors seeking vulnerability to the casual eating sector.

Previously we covered a bullish thesis on The Cheesecake Factory Incorporated (CAKE) by TyNads successful May 2025, which highlighted its translation into a multi-brand platform, unchangeable profitability, and underappreciated maturation assets similar North Italia and Flower Child. The banal has depreciated astir by 1% since coverage. The thesis inactive stands arsenic CAKE maintains beardown currency travel and maturation potential. Gregg Jahnke shares a akin position but emphasizes humanities undervaluation and imaginable upside from off-premises income and paper innovations.