Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Cheesecake Factory Incorporated (CAKE), Brinker International, Inc. (EAT), Darden Restaurants, Inc. (DRI): Dig in to This “Penny” Stock: A SWOT Analysis

Page 1 of 2

Upscale casual dining restaurant The Cheesecake Factory Incorporated (NASDAQ:CAKE) has been whetting investors’ appetites recently with a gain of 30.82% this last year.

The Cheesecake Factory Incorporated (NASDAQ:CAKE) is known to many as the workplace of Big Bang Theory‘s Penny where she waits tables in Pasadena until her big break in Hollywood.

The Cheesecake Factory Incorporated (NASDAQ:CAKE)

Of interest is that general managers get a new BMW lease every three years. Maybe Penny should try for a promotion… she would also receive bonuses and stock!

Is the stock worth it for Penny? Or you?


The company reported Q1 earnings in April that their comp sales were positive for 13 consecutive quarters. Averaged over two years the sales comp is 3.8%.

Fellow Fool Ted Cooper gives the restaurant props for inventory efficiency in the casual dining space, outperforming rivals Brinker International, Inc. (NYSE:EAT) and Darden Restaurants, Inc. (NYSE:DRI).

The Cheesecake Factory Incorporated (NASDAQ:CAKE) are generally located in or adjacent to upscale malls, being at the high end of casual dining with a huge menu of over 200 options (which Penny has yet to memorize).

Analysts expect 13.84% five year EPS growth for The Cheesecake Factory Incorporated (NASDAQ:CAKE). This is twice as high as the growth rate for Darden Restaurants, Inc. (NYSE:DRI) at 6.95%.

It trades at 3.70 times book which is lower than Brinker International, Inc. (NYSE:EAT) at 11.22, but higher than Darden Restaurants, Inc. (NYSE:DRI) at 3.18.

The company was named two years straight as Most Preferred Casual Dining Restaurant based on customer votes by Nation’s Restaurant News Consumer Picks.

The Cheesecake Factory Incorporated (NASDAQ:CAKE) has improved operating margins by 260 basis points since 2009, with 50 basis points betterment in 2012 and another 50 basis points improvement expected in 2013.

The company has strong insider conviction at 5% plus. CEO Overton holds 120,000 shares.


The stock hit a multi-year high of $42.60 on July 1, exceeding its median price target of $42.00. The P/E stands at 22.55 with a trailing P/E of 17.25. The short interest at 12.80% is growing as the stock rises.

Analysts are neutral with 18 Holds, 1 Underperform, 5 Buys, and 3 Strong Buys.

It offers a yield of 1.10% with a trailing P/E of 22.48. This is lower than rivals Darden Restaurants, Inc. (NYSE:DRI) at 4% and Brinker International, Inc. (NYSE:EAT) at 2.00%. Its PEG is 1.40.

Those manager benefits may seem out of line as many industries, especially restaurants have dropped such perks, but according to CEO David Overton manager retention is in line or above last year’s levels. While Penny has been working at the The Cheesecake Factory Incorporated (NASDAQ:CAKE) for six TV seasons the average general manager works there for a decade. Is it a strength or a weakness… you decide.


The company owns 162 restaurants mostly in the US with plans to expand to 300. The company is opening another 8-10 US company-owned restaurants this year.

Sales at its three restaurants in the Middle East were reported to be strong on the Q1conference call delivering higher than expected sales volumes. Each of those three restaurants adds $0.01 per share to earnings. The company is looking to expand to Asia once it finds partners. Within eight years the company has agreements in place for a minimum of a dozen openings in Mexico and Chile. The company plans three international openings this year.

Soon offering up to 70 gluten-free options. Unless you’ve been hiding under a rock, gluten-free is one of the biggest trends in food this year thanks to diet plans like the popular Paleo diet.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!