CAKE
The Cheesecake Factory Incorporated
$80.27
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 29.6% above fair value
You pay
$80.27
Bear
$51.02
Fair
$61.95
Bull
$72.87
Bear
$51.02
-36.4%
$3.53 × 14x P/E
Fair
$61.95
-22.8%
$3.53 × 17x P/E
Bull
$72.87
-9.2%
$3.53 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
22.7x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $66.50 from 48 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $61.95 per share.
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