Are Investors Undervaluing The Cheesecake Factory (CAKE) Right Now?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.The Cheesecake Factory (CAKE) is a stock many investors are watching right now. CAKE is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 12.16, while its industry has an average P/E of 25.67. Over the last 12 months, CAKE's Forward P/E has been as high as 13.36 and as low as 9.89, with a median of 11.28.We also note that CAKE holds a PEG ratio of 1.12. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CAKE's industry has an average PEG of 1.77 right now. Within the past year, CAKE's PEG has been as high as 1.23 and as low as 0.46, with a median of 1.04.Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CAKE has a P/S ratio of 0.61. This compares to its industry's average P/S of 0.88.Finally, investors should note that CAKE has a P/CF ratio of 9.73. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 22.57. Over the past 52 weeks, CAKE's P/CF has been as high as 9.91 and as low as 7.85, with a median of 8.84.Value investors will likely look at more than just these metrics, but the above data helps show that The Cheesecake Factory is likely undervalued currently. And when considering the strength of its earnings outlook, CAKE sticks out at as one of the market's strongest value stocks.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Cheesecake Factory Incorporated (CAKE): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks