CAKE Should I Buy
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Cheesecake Factory Inc (CAKE) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown positive financial growth in the latest quarter and has some bullish analyst ratings, the technical indicators, insider selling trends, and options data suggest caution. The lack of significant positive catalysts and recent market underperformance further support a hold recommendation.
The MACD is negative and expanding downward, indicating bearish momentum. RSI is neutral at 37.336, suggesting no clear signal. The moving averages are bullish (SMA_5 > SMA_20 > SMA_200), but the stock is trading below the pivot level of 60.463, with key support at 57.426. Overall, the technical indicators are mixed, leaning slightly bearish.
Revenue, net income, EPS, and gross margin all increased YoY in Q3 2025, reflecting solid financial performance.
Citi recently raised the price target to $72 with a Buy rating.
Insiders are selling heavily, with a 234.86% increase in selling activity over the last month.
Raymond James downgraded the stock to Market Perform, citing valuation concerns.
Options data shows bearish sentiment with a high put-call volume ratio.
The stock dropped 4.68% in the regular market session, underperforming the S&P 500 (-1.54%).
In Q3 2025, Cheesecake Factory's revenue increased by 4.82% YoY to $907.23M. Net income rose by 6.35% YoY to $31.9M, and EPS grew by 8.20% YoY to 0.66. Gross margin improved slightly to 75.19%. Overall, the company demonstrated steady financial growth.
Analyst sentiment is mixed. Citi raised its price target to $72 with a Buy rating, while BofA raised its target to $66 with a Neutral rating. Raymond James downgraded the stock to Market Perform, citing valuation concerns. Morgan Stanley and Barclays maintain Underweight ratings with price targets of $50 and $51, respectively. Freedom Capital initiated coverage with a Hold rating and a $56 price target.
