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.Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.One stock to keep an eye on is The Cheesecake Factory (CAKE). CAKE is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 13.87 right now. For comparison, its industry sports an average P/E of 25.31. Over the past year, CAKE's Forward P/E has been as high as 14.65 and as low as 10.04, with a median of 11.58.Investors will also notice that CAKE has a PEG ratio of 1.25. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CAKE's PEG compares to its industry's average PEG of 1.74. Over the past 52 weeks, CAKE's PEG has been as high as 1.32 and as low as 0.56, with a median of 1.09.Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. 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 0.74. This compares to its industry's average P/S of 0.75.Finally, our model also underscores that CAKE has a P/CF ratio of 10.97. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 22.07. Within the past 12 months, CAKE's P/CF has been as high as 11.15 and as low as 7.85, with a median of 8.99.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 Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want 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