Cheesecake Factory (CAKE) Stock Forecast & Price Target

The Cheesecake Factory Inc. has demonstrated a positive operational trajectory, evidenced by an adjusted net income margin of 3.7%, reflecting a year-over-year increase of approximately 40 basis points, alongside a 14.5% year-over-year growth in adjusted EBITDA to around $66 million. The company's restaurant-level margins are expected to show continued expansion, projected to increase from approximately 15.9% in FY25 to 16.1% in FY26, supported by productivity initiatives that counterbalance wage and inflation pressures. Notably, the Cheesecake Factory brand has experienced a substantial restaurant-level margin expansion of around 500 basis points over the past two and a half years, rising from 12.5% to 17.5% on a trailing twelve-month basis, underscoring effective management and operational efficiencies.

The Cheesecake Factory Inc. has reported a 4Q25 revenue guidance of $940–$955 million, indicating a stagnation in comparable sales for its key Cheesecake Factory segment, while North Italia experienced a decline of 3%. Significant challenges are evident with a noted 6% decline in customer traffic and an overall midweek lunch weakness, alongside disruptions from regional fires affecting sales and unit growth. Additionally, while the company implemented a pricing increase of approximately 4%, the decline in traffic and adverse mix effects highlight underlying issues that could hinder future growth and profitability.