Cheesecake Factory (CAKE) Stock Forecast & Price Target

The Cheesecake Factory Inc. has demonstrated solid financial performance, with adjusted EBITDA rising 14.5% year-over-year to approximately $66 million, indicating effective operational strategies despite sales challenges. The company is expected to see an increase in restaurant-level margins, projected at 15.9% for FY25 and expanding to 16.1% in FY26, signaling positive productivity improvements that mitigate wage and inflation pressures. Additionally, the growth of its brands, showing high sales per square foot and anticipated annual growth rates over 15%, contributes to an overall revenue growth outlook in the range of 7-8%.

The Cheesecake Factory Inc. projects Q4 2025 revenues between $940 million and $955 million, indicating a slight decline in comparable sales for its namesake restaurants, which may reflect broader weakness in consumer traffic and spending in casual dining. The company has also reported challenges in its North Italia segment, with a 3% decline in comparable sales, exacerbated by factors such as increased cannibalization from new store openings and a shift in consumer behavior towards lower-priced options. Additionally, the heavy reliance on consumer discretionary spending, coupled with economic uncertainties and vulnerabilities associated with mall locations, heightens the risk of operational volatility and potential sales declines.