# The Cheesecake Factory (CAKE.US)

Canonical: https://gigainvestors.com/s/CAKE

Analysis as of: 2026-10-16T07:27:13.137Z. Financial observations: FY1996–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $116.59 per share; close as of 2026-10-15.

Estimated value: low $33.47 per share, central $42.68 per share, high $49.50 per share. Buy at or below the central value $42.68 per share. Valuation as of 2026-10-16T07:27:13.137Z; scenarios are not confidence intervals.

Expected annual return: 5.5% at the stated quote. About 5.5% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 2 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 1

- Operating margin variation: 2.84×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.09×

- FY2017: 0.07×

- FY2018: 0.05×

- FY2019: 0.04×

- FY2020: -0.18×

- FY2021: 0.03×

- FY2022: 0.01×

- FY2023: 0.03×

- FY2024: 0.05×

- FY2025: 0.05×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 4.9%

- ROIC, second-lowest year: 1.9%

- Typical minus recent gross margin: -36.2 pp

- Typical gross margin (annual median): 41.3%

- Recent gross margin (lower of latest and 3-year median): 77.5%

- Years with nonpositive capital: 0

- Capital spending / revenue: 4.2%

- ROIC including acquisitions, ten-year median: 5.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 22.5%

- FY2017: 24.0%

- FY2018: 19.0%

- FY2019: 4.6%

- FY2020: -13.8%

- FY2021: 4.2%

- FY2022: 1.9%

- FY2023: 5.1%

- FY2024: 7.2%

- FY2025: 4.6%

### economics: pass

- Owner earnings / net income, 5-yr: 1.04×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $544M

- Net income, five-year total: $522M

- Return on incremental invested capital: 22.7%

- Working capital / revenue, annual change: -0.0 pp

- Working capital / revenue, change between three-year averages: -0.2 pp

- Working capital / revenue, final three-year average: 3.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.31×

- FY2022: 1.00×

- FY2023: 1.00×

- FY2024: 1.00×

- FY2025: 1.00×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 22.5% vs 5.1%

- Per-share earnings: 2.86 to 3.06 (three-year endpoint medians)

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.4%

- Ordinary dilution, 5-year annual growth: 2.0%

- Market cap gain: -$416M

- Cumulative retained earnings: $175M

- Diluted shares, 10-year annual growth: -0.4%

- Diluted shares, 5-year annual growth: 2.0%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 0.8%

- Per-share value change: $0.20

- Per-share value, starting three-year median: $2.86

- Per-share value, ending three-year median: $3.06

- Buybacks concentrated in cheaper years (correlation): 0.36

- Average buyback yield: 3.3%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $495M

- Cumulative net income, 10 years: $792M

- ROIC, first three-year median: 22.5%

- ROIC, last three-year median: 5.1%

Chart: Earnings per share; fiscal year observations.

- FY2016: $2.86

- FY2017: $3.27

- FY2018: $2.14

- FY2019: $2.86

- FY2020: -$5.78

- FY2021: $1.49

- FY2022: $0.86

- FY2023: $2.07

- FY2024: $3.20

- FY2025: $3.06

### accounting: pass

- latest-year receivables to sales index (DSRI) exceeds 1.465

- Sloan accruals: -4.7%

- Receivables to sales index (DSRI): 1.58×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 9.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.03×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.58×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -12.6%

- FY2017: -6.1%

- FY2018: -14.6%

- FY2019: -3.2%

- FY2020: -9.3%

- FY2021: -5.0%

- FY2022: -4.3%

- FY2023: -4.1%

- FY2024: -3.7%

- FY2025: -4.7%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Dan Davidowitz](https://gigainvestors.com/pcm): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 17.4% a year for ten years · sales +4.7%

Story as of 2026-10-16T09:58:27.275Z; price observation 2026-10-15.

Price needs cash profits to grow 17.4% a year for ten years

- 2026-07-29: Cheesecake Factory quarterly revenues surpass $1B for the first time ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/cheesecake-factory-quarterly-revenues-surpass-155048712.html))

### Sales · FY2024–2025

sales +4.7%; source https://www.sec.gov/Archives/edgar/data/887596/000110465926018643/cake-20251230x10k.htm; observed 2026-02-23.

- FY2016: $2.3B 

- FY2017: $2.3B 

- FY2018: $2.3B 

- FY2019: $2.5B 

- FY2020: $2.0B 

- FY2021: $2.9B 

- FY2022: $3.3B 

- FY2023: $3.4B 

- FY2024: $3.6B 

- FY2025: $3.8B 

### Gross margin · FY2025

gross margin 78.3%; source https://www.sec.gov/Archives/edgar/data/887596/000110465926018643/cake-20251230x10k.htm; observed 2026-02-23.

- FY2016: 43.5% 

- FY2017: 42.6% 

- FY2018: 41.4% 

- FY2019: 41.1% 

- FY2020: 37.6% 

- FY2021: 41.1% 

- FY2022: 38.8% 

- FY2023: 40.9% 

- FY2024: 77.5% 

- FY2025: 78.3% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in restaurants; annual sales are USD 3.8 billion.

- Source: https://www.sec.gov/Archives/edgar/data/887596/000110465926018643/cake-20251230x10k.htm (filed 2026-02-23); FY2025: revenue 3751806000; grossProfit 2938659000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 40.9% to 78.3% during 2023–25; it earns 4.9% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2023: grossProfit / revenue = 40.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2024: grossProfit / revenue = 77.5%.

- Source: https://www.sec.gov/Archives/edgar/data/887596/000110465926018643/cake-20251230x10k.htm (filed 2026-02-23); FY2025: grossProfit / revenue = 78.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); 10-year return on capital observations [[2016,0.22494916351542238],[2017,0.24010072464564938],[2018,0.18999500214726478],[2019,0.04599826132049909],[2020,-0.13804899798566073],[2021,0.04210225901087975],[2022,0.019309136120110912],[2023,0.051204870419596385],[2024,0.0721285418911591],[2025,0.046353649860802995]]; median 0.04877926014019969. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Spends 25% of cash earnings on expansion; earns 22.7% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2016: growth capex 29451000; upkeep 88010000; owner earnings 139494000. Growth capex / owner earnings = 0.21112736031657275.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2017: growth capex 0; upkeep 122433000; owner earnings 127688000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2018: growth capex 9953000; upkeep 95976000; owner earnings 99035000. Growth capex / owner earnings = 0.10049982329479477.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2019: growth capex 0; upkeep 75865000; owner earnings 139561000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2021: growth capex 0; upkeep 67549000; owner earnings 94478000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2022: growth capex 20764000; upkeep 92380000; owner earnings 43123000. Growth capex / owner earnings = 0.48150638870208473.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2023: growth capex 60087000; upkeep 93136000; owner earnings 101351000. Growth capex / owner earnings = 0.5928604552495782.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2024: growth capex 58914000; upkeep 101450000; owner earnings 156783000. Growth capex / owner earnings = 0.37576778094563823.

- Source: https://www.sec.gov/Archives/edgar/data/887596/000110465926018643/cake-20251230x10k.htm (filed 2026-02-23); FY2025: growth capex 37173000; upkeep 109031000; owner earnings 148427000. Growth capex / owner earnings = 0.2504463473626766.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); Incremental return on capital 0.2274694610919523, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); Dividend observations: [[2016,42371000],[2017,49889000],[2018,56251000],[2019,60722000],[2020,15791000],[2021,18998000],[2022,42272000],[2023,53207000],[2024,53041000],[2025,52192000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/887596/000110465926018643/cake-20251230x10k.htm (filed 2026-02-23); FY2025: cash repurchases 153896000 USD.

### Are managers owners

Insiders own 7.5% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); CAKE.US SharesStats.PercentInsiders = 7.455 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 17.4% yearly over ten years; actual growth was 4.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); Ten-year compound average after fade. Initial solved rate 0.23861325597541028. Price 116.59; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.9613675793860161 → FY2025 3.0571357953492204. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $53.19 per share

- 2016-11: $59.17 per share

- 2016-12: $59.88 per share

- 2017-01: $60.26 per share

- 2017-02: $61.05 per share

- 2017-03: $63.36 per share

- 2017-04: $64.16 per share

- 2017-05: $58.98 per share

- 2017-06: $50.30 per share

- 2017-07: $47.58 per share

- 2017-08: $41.43 per share

- 2017-09: $42.12 per share

- 2017-10: $44.74 per share

- 2017-11: $49.04 per share

- 2017-12: $48.18 per share

- 2018-01: $49.19 per share

- 2018-02: $46.49 per share

- 2018-03: $48.22 per share

- 2018-04: $51.95 per share

- 2018-05: $51.81 per share

- 2018-06: $55.06 per share

- 2018-07: $56.03 per share

- 2018-08: $53.17 per share

- 2018-09: $53.54 per share

- 2018-10: $48.34 per share

- 2018-11: $47.19 per share

- 2018-12: $43.51 per share

- 2019-01: $44.88 per share

- 2019-02: $47.30 per share

- 2019-03: $48.92 per share

- 2019-04: $49.62 per share

- 2019-05: $43.25 per share

- 2019-06: $43.72 per share

- 2019-07: $43.08 per share

- 2019-08: $37.99 per share

- 2019-09: $41.68 per share

- 2019-10: $41.79 per share

- 2019-11: $43.61 per share

- 2019-12: $38.86 per share

- 2020-01: $38.40 per share

- 2020-02: $35.63 per share

- 2020-03: $17.08 per share

- 2020-04: $22.29 per share

- 2020-05: $21.48 per share

- 2020-06: $22.92 per share

- 2020-07: $24.00 per share

- 2020-08: $29.53 per share

- 2020-09: $27.74 per share

- 2020-10: $29.72 per share

- 2020-11: $37.48 per share

- 2020-12: $37.06 per share

- 2021-01: $44.97 per share

- 2021-02: $54.95 per share

- 2021-03: $58.51 per share

- 2021-04: $62.59 per share

- 2021-05: $58.82 per share

- 2021-06: $54.18 per share

- 2021-07: $45.26 per share

- 2021-08: $46.65 per share

- 2021-09: $47.00 per share

- 2021-10: $40.64 per share

- 2021-11: $38.32 per share

- 2021-12: $39.15 per share

- 2022-01: $35.68 per share

- 2022-02: $42.79 per share

- 2022-03: $39.79 per share

- 2022-04: $36.91 per share

- 2022-05: $32.66 per share

- 2022-06: $26.42 per share

- 2022-07: $29.23 per share

- 2022-08: $30.62 per share

- 2022-09: $29.28 per share

- 2022-10: $35.81 per share

- 2022-11: $35.04 per share

- 2022-12: $31.71 per share

- 2023-01: $39.25 per share

- 2023-02: $37.44 per share

- 2023-03: $35.05 per share

- 2023-04: $33.69 per share

- 2023-05: $31.33 per share

- 2023-06: $34.58 per share

- 2023-07: $36.78 per share

- 2023-08: $31.85 per share

- 2023-09: $30.30 per share

- 2023-10: $31.07 per share

- 2023-11: $31.35 per share

- 2023-12: $35.01 per share

- 2024-01: $34.37 per share

- 2024-02: $35.38 per share

- 2024-03: $36.15 per share

- 2024-04: $34.52 per share

- 2024-05: $38.48 per share

- 2024-06: $39.29 per share

- 2024-07: $38.89 per share

- 2024-08: $39.31 per share

- 2024-09: $40.55 per share

- 2024-10: $46.22 per share

- 2024-11: $50.64 per share

- 2024-12: $47.44 per share

- 2025-01: $56.15 per share

- 2025-02: $54.03 per share

- 2025-03: $48.66 per share

- 2025-04: $50.37 per share

- 2025-05: $55.17 per share

- 2025-06: $62.66 per share

- 2025-07: $63.91 per share

- 2025-08: $61.46 per share

- 2025-09: $54.64 per share

- 2025-10: $49.80 per share

- 2025-11: $47.66 per share

- 2025-12: $50.48 per share

- 2026-01: $57.96 per share

- 2026-02: $64.78 per share

- 2026-03: $54.75 per share

- 2026-04: $62.87 per share

- 2026-05: $66.04 per share

- 2026-06: $79.54 per share

- 2026-07: $101.42 per share

- 2026-08: $109.49 per share

- 2026-09: $105.24 per share

- 2026-10: $116.59 per share

## Annual estimated value (USD per share)

- FY2016: low $33.77 per share, central $46.90 per share, high $54.99 per share

- FY2017: low $34.85 per share, central $48.08 per share, high $56.38 per share

- FY2018: low $31.76 per share, central $40.85 per share, high $47.75 per share

- FY2019: low $37.20 per share, central $45.89 per share, high $53.49 per share

- FY2020: low $30.39 per share, central $34.22 per share, high $39.31 per share

- FY2021: low $30.71 per share, central $34.57 per share, high $39.71 per share

- FY2022: low $24.08 per share, central $27.26 per share, high $31.51 per share

- FY2023: low $22.58 per share, central $25.70 per share, high $29.84 per share

- FY2024: low $27.21 per share, central $35.57 per share, high $41.58 per share

- FY2025: low $33.75 per share, central $42.88 per share, high $49.65 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/887596/000110465926018643/cake-20251230x10k.htm); period 2025-12-30, filed 2026-02-23.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.