CAKE
The Cheesecake Factory Incorporated
$114.92
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 120.2% above fair value
You pay
$114.92
Bear
$42.98
Fair
$52.19
Bull
$61.40
Bear
$42.98
-62.6%
$3.07 × 14x P/E
Fair
$52.19
-54.6%
$3.07 × 17x P/E
Bull
$61.40
-46.6%
$3.07 × 20x P/E
Adjust Assumptions
17.0x
3.07$
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
37.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (48 analysts)
$89.36
Divergence from AlphaVal
42%
Summary
Applying a 17x P/E to adjusted EPS of $3.07, the base-case value is $52.19 per share.
Warnings
Wall Street's average price target is $89.36 (from 48 analysts). Our estimate is 42% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples