Cheesecake Factory (CAKE) Stock Forecast & Price Target

The Cheesecake Factory Inc. has demonstrated a positive financial trajectory, highlighted by an adjusted EBITDA growth of 14.5% year-over-year, reaching approximately $66 million, which reflects effective operational management despite subdued sales conditions. The company’s restaurant-level margins have expanded significantly, showcasing a remarkable increase of approximately 500 basis points over the past two and a half years, from 12.5% to 17.5% on a trailing twelve-month basis. Furthermore, adjusted net income margin improved to 3.7%, indicating greater profitability, bolstered by ongoing productivity initiatives that are expected to mitigate wage and inflationary pressures in the future.

The Cheesecake Factory is facing headwinds as it anticipates revenue for the fourth quarter of 2025 in the range of $940–$955 million, which reflects stagnation in comparable sales for its flagship restaurants and a notable decline of 3% in North Italia's comparable sales. These financial struggles are compounded by challenges such as declining consumer foot traffic, particularly in high-traffic mall locations, as well as disruptions caused by local incidents such as fires and market cannibalization effects from new openings. Additionally, the company reports a concerning trend of declining restaurant-level margins in its "Other FRC" segment, indicating underlying operational difficulties amidst a challenging economic environment.