As of June 13, 2025, Cheesecake Factory Inc's estimated intrinsic value ranges from $52.56 to $244.69 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $67.94 | +15.6% |
| Discounted Cash Flow (5Y) | $61.49 | +4.6% |
| Dividend Discount Model (Multi-Stage) | $52.56 | -10.6% |
| Dividend Discount Model (Stable) | $57.18 | -2.7% |
| Earnings Power Value | $244.69 | +316.2% |
Is Cheesecake Factory Inc (CAKE) undervalued or overvalued?
With the current market price at $58.79, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Cheesecake Factory Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.52 | 0.77 |
| Cost of equity | 6.3% | 9.2% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 5.5% | 16.5% |
| Debt/Equity ratio | 0.16 | 0.16 |
| After-tax WACC | 5.9% | 8.5% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $61 | $3,538M | 78.8% |
| 10-Year Growth | $68 | $3,857M | 62.6% |
| 5-Year EBITDA | $41 | $2,499M | 69.9% |
| 10-Year EBITDA | $50 | $2,983M | 51.6% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $878M |
| Discount Rate (WACC) | 8.5% - 5.9% |
| Enterprise Value | $10,385M - $14,838M |
| Net Debt | $492M |
| Equity Value | $9,893M - $14,346M |
| Outstanding Shares | 50M |
| Fair Value | $200 - $290 |
| Selected Fair Value | $244.69 |
| Metric | Value |
|---|---|
| Market Capitalization | $2912M |
| Enterprise Value | $3404M |
| Trailing P/E | 18.60 |
| Forward P/E | 17.31 |
| Trailing EV/EBITDA | 6.45 |
| Current Dividend Yield | 184.06% |
| Dividend Growth Rate (5Y) | 35.36% |
| Debt-to-Equity Ratio | 0.16 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $20.38 |
| Discounted Cash Flow (5Y) | 25% | $15.37 |
| Dividend Discount Model (Multi-Stage) | 20% | $10.51 |
| Dividend Discount Model (Stable) | 15% | $8.58 |
| Earnings Power Value | 10% | $24.47 |
| Weighted Average | 100% | $79.31 |
Based on our comprehensive valuation analysis, Cheesecake Factory Inc's weighted average intrinsic value is $79.31, which is approximately 34.9% above the current market price of $58.79.
Key investment considerations:
Given these factors, we believe Cheesecake Factory Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.