Value
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.7 |
| P/S | 9.4 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.8 |
| PEG | 5.1 |
| Analyst target | 3.0 |
- ▸Forward P/E: 22.1x
- ▸PEG: 1.48
CAKE · Why this verdict
Why The Cheesecake Factory Incorpor (CAKE) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.3/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Cheesecake Factory has a perfect four-quarter beat streak and strong growth, but the price is 15% above the analyst target, short interest is 40%, and momentum is weak.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
CAKE beat EPS estimates in 4 of 4 recent quarters with an average surprise of about 8.4%. Earnings | EPS keeps beating consensus. | ↓Deteriorating |
| CounterRestaurant margins are sensitive to food and labour costs, so beats can fade. | ||
The price is 15.1% above the analyst target of $95.64. Warnings | Targets are raised toward the price as growth continues. | ↑Improving |
| CounterStrong growth of 8.0 out of 10 may justify further target increases. | ||
Short interest is 40% with quality scoring 4.6, a sign that many investors expect a decline. Key risks | Short interest falls below 25%. | ↑Improving |
| CounterWith 40% short interest, a squeeze is possible if earnings keep beating. | ||
Momentum scores 3.8 with falling on-balance volume, and insiders sold about $17.2M. Momentum breakdown | Momentum score rises above 4.5. | ↑Improving |
| CounterPrice is above the 200-day average, so the trend is still intact. | ||
CAKE beat EPS estimates in 4 of 4 recent quarters with an average surprise of about 8.4%.
↓DeterioratingEarnings
- Expectation
- EPS keeps beating consensus.
CounterRestaurant margins are sensitive to food and labour costs, so beats can fade.
The price is 15.1% above the analyst target of $95.64.
↑ImprovingWarnings
- Expectation
- Targets are raised toward the price as growth continues.
CounterStrong growth of 8.0 out of 10 may justify further target increases.
Short interest is 40% with quality scoring 4.6, a sign that many investors expect a decline.
↑ImprovingKey risks
- Expectation
- Short interest falls below 25%.
CounterWith 40% short interest, a squeeze is possible if earnings keep beating.
Momentum scores 3.8 with falling on-balance volume, and insiders sold about $17.2M.
↑ImprovingMomentum breakdown
- Expectation
- Momentum score rises above 4.5.
CounterPrice is above the 200-day average, so the trend is still intact.
Per-dimension breakdown
Quality
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 3.3 |
| Gross margin | 4.2 |
| Op margin | 2.4 |
| Net margin | 2.6 |
| Current ratio | 1.4 |
| FCF quality | 6.6 |
| Moat | 6.8 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 42%
- ▸Strong Piotroski F-Score: 7/9
Growth
8.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.0 |
| EPS growth | 10.0 |
Momentum
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 4.4 |
| erm sentiment | 5.2 |
Insider
3.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.4 |
- ▸Notable insider selling — $7,134,464 (0.124% of mkt cap)
Peer rank
5.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.9 |
| quality rank | 6.3 |
| growth rank | 7.7 |
Technical
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.8 |
| support resistance | 3.6 |
| 52w position | 8.7 |
Risk (lower is worse)
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| days to cover | 2.4 |
| volatility | 0.4 |
| put call | 8.7 |
| implied vol | 5.2 |
| max pain risk | 3.0 |
| beta | 6.5 |
| debt equity | 1.3 |
- ▸Short squeeze setup: 40% short, quality 7.5
- ▸Above max pain $70
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.7 |
| dividend safety | 6.8 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:104d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.3<4.5
- ASYMMETRY:-1.1=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.14
Upside
-13.9%
Downside
12.2%
Sizing output
AVOID
SetupRange Bound — RSI 45 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 1.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 8.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.3<4.5, ASYMMETRY:-1.1=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.14 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 8.0, Catalyst at 6.7, and Technical at 6.0; the weakest are Insider at 3.5, Momentum at 4.3, and Risk (lower is worse) at 4.7. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -1.14 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P2Price Above Target
Trip ifUpside to the analyst target stays below -10% for 2 consecutive quarters.
- P3High Short Interest
Trip ifShort interest stays above 35% for 2 consecutive quarters.
- P4Weak Momentum Insiders
Trip ifMomentum score falls below 3.0 from the current 3.8.