The Cheesecake Factory Incorporated (CAKE) can make a big difference with a little luck

The Cheesecake Factory Incorporated (NASDAQ: CAKE) stock jumped 6.42% on Friday to $30.99 against a previous-day closing price of $29.12. With 1.33 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.05 million shares. During the session, the Restaurants company that operates in wider Consumer Cyclical sector, reached to the highest price of $31.17 whereas the lowest price it dropped to was $29.08. The 52-week range on CAKE shows that it touched its highest point at $51.19 and its lowest point at $26.05 during that stretch. It currently has a 1-year price target of $33.93. With its current market cap of 1.58 billion, CAKE has annualized dividend of $1.08 while the current yield stands at 3.48%. Beta for the stock currently stands at 1.49.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of CAKE was up-trending over the past week, with a rise of 9.93%, but this was up by 8.51% over a month. Three-month performance dropped to -18.28% while six-month performance fell -15.88%. The stock lost -28.86% in the past year, while it has lost -20.84% so far this year. A look at the trailing 12-month EPS for CAKE yields 1.66 with Next year EPS estimates of 3.00. For the next quarter, that number is 0.30. This implies an EPS growth rate of 116.10% for this year and 39.63% for next year. EPS is expected to grow by 17.68% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -18.50%.

Float and Shares Shorts:

At present, 50.33 million CAKE shares are outstanding with a float of 49.03 million shares on hand for trading. On Jul 14, 2022, short shares totaled 7.65 million, which was 14.49% higher than short shares on Jun 14, 2022. In addition to Mr. David M. Overton as the firm’s Chairman & CEO, Mr. David M. Gordon serves as its Pres.

Institutional Ownership:

Through their ownership of 84.00% of CAKE’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 7.59% of CAKE, in contrast to 48.92% held by mutual funds. Shares owned by individuals account for 32.51%. As the largest shareholder in CAKE with 13.71% of the stake, BlackRock Fund Advisors holds 7,237,901 shares worth 7,237,901. A second-largest stockholder of CAKE, The Vanguard Group, Inc., holds 5,257,593 shares, controlling over 9.96% of the firm’s shares. Kayne Anderson Rudnick Investment is the third largest shareholder in CAKE, holding 4,343,139 shares or 8.23% stake. With a 6.56% stake in CAKE, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 3,464,958 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.80% of CAKE stock, is the second-largest Mutual Fund holder. It holds 1,480,381 shares valued at 39.11 million. Baron Small Cap Fund holds 2.70% of the stake in CAKE, owning 1,425,000 shares worth 37.65 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for CAKE since 19 analysts follow the stock currently. There are 7 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 9 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With CAKE analysts setting a high price target of $46.00 and a low target of $26.00, the average target price over the next 12 months is $33.93. Based on these targets, CAKE could surge 48.43% to reach the target high and fall by -16.1% to reach the target low. Reaching the average price target will result in a growth of 9.49% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. CAKE will report FY 2022 earnings on 02/15/2023. Analysts have provided yearly estimates in a range of $3.18 being high and $1.62 being low. For CAKE, this leads to a yearly average estimate of $2.09. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. The Cheesecake Factory Incorporated surprised analysts by -$0.25 when it reported $0.52 EPS against a consensus estimate of $0.77. The surprise factor in the prior quarter was -$0.04. Based on analyst estimates, the high estimate for the next quarter is $0.52 and the low estimate is $0.13. The average estimate for the next quarter is thus $0.28.

Dividends & Yield:

In terms of dividends, CAKE has a current ratio of $1.08, which is $1.08 over the trailing 12-months, while a dividend of $1.09 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and CAKE currently yields $0.87. In the past year, CAKE’s dividend yield has been $0.87, but when looking at the stock over the past five years, its yield has been $2.8. Accordingly, CAKE has a current buyback yield of $0.99. This was $0.99 for the TTM, and it was $4.01 for the past five years.

Summary of Insider Activity:

Insiders traded CAKE stock several times over the past three months with 4 Buys and 1 Sells. In these transactions, 13,202 shares were bought while 160 shares were sold. The number of buy transactions has increased to 18 while that of sell transactions has risen to 13 over the past year. The total number of shares bought during that period was 138,430 while 28,803 shares were sold.

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