Should Value Investors Buy The Cheesecake Factory (CAKE) Stock?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 14.30. This compares to its industry's average Forward P/E of 27.15. Over the last 12 months, CAKE's Forward P/E has been as high as 15.22 and as low as 10.04, with a median of 11.65.We also note that CAKE holds a PEG ratio of 1.27. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CAKE's PEG compares to its industry's average PEG of 2.03. Over the past 52 weeks, CAKE's PEG has been as high as 1.37 and as low as 0.58, with a median of 1.10.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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CAKE has a P/S ratio of 0.76. This compares to its industry's average P/S of 0.82.Finally, our model also underscores that CAKE has a P/CF ratio of 11.48. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CAKE's current P/CF looks attractive when compared to its industry's average P/CF of 23.66. CAKE's P/CF has been as high as 12.21 and as low as 7.85, with a median of 9.05, all within the past year.These are just a handful of the figures considered in The Cheesecake Factory's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CAKE is an impressive value stock right now.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>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