Cheesecake Factory (CAKE) Stock Forecast & Price Target

The Cheesecake Factory has demonstrated a robust financial performance, with adjusted EBITDA growing 14.5% year-over-year to approximately $66 million, indicating effective operational leverage despite a challenging sales environment. The company's restaurant-level margins have also shown a significant increase, expanding from 12.5% to 17.5% over a two-and-a-half-year period, driven by productivity initiatives that offset wage and inflationary pressures. Furthermore, management's focus on improving mature store margins has resulted in positive year-over-year growth, contributing to a favorable outlook for the company's overall profitability.

The Cheesecake Factory Inc. has provided guidance indicating revenue expectations of $940–$955 million for 4Q25, which reflects a stagnation in comparable sales for its flagship brand. The North Italia segment, facing a 3% decline in comparable store sales, contrasts unfavorably with broader market expectations, highlighting potential weaknesses in consumer demand amid ongoing disruptions and shifts in dining preferences. Additionally, the company has noted significant challenges due to traffic declines in key dining times, coupled with cannibalization from new unit openings and consumer trade-down behaviors, suggesting a concerning trend for revenue growth and profitability moving forward.