Cheesecake Factory (CAKE) Stock Forecast & Price Target

The Cheesecake Factory Inc. has demonstrated a positive financial trajectory, highlighted by a 14.5% year-over-year growth in adjusted EBITDA to approximately $66 million, which indicates strong operational leverage despite moderate sales. The company's strategic productivity initiatives are expected to enhance restaurant-level margins from approximately 15.9% in FY25 to 16.1% in FY26, effectively countering wage and inflationary pressures. Furthermore, the strong performance of its growth brands, projected to achieve over 15% annual growth, supports an overall revenue expansion in the range of 7-8%, bolstering a favorable long-term outlook for the company.

The Cheesecake Factory Inc. has guided for 4Q25 revenue between $940 million to $955 million, reflecting same-store sales for its flagship restaurants segment that could decline up to 1%, indicating potential weakness against consensus expectations. The company's North Italia segment reported a 3% decline in same-store sales, exacerbated by disruptions from local fires and a noticeable drop in consumer traffic, particularly for midweek lunch. Additionally, ongoing macroeconomic challenges, including high unemployment and possible recession fears, raise concerns about the company’s reliance on consumer discretionary spending, which could lead to operational volatility and further impact its sales performance.