The Cheesecake Factory Incorporated (CAKE) Hit a 52 Week High, Can the Run Continue?

Have you been paying attention to shares of Cheesecake Factory (CAKE)? Shares have been on the move with the stock up 11.9% over the past month. The stock hit a new 52-week high of $53.46 in the previous session. Cheesecake Factory has gained 11.9% since the start of the year compared to the 37.2% move for the Zacks Retail-Wholesale sector and the 6.2% return for the Zacks Retail - Restaurants industry.What's Driving the Outperformance?The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 29, 2024, Cheesecake Factory reported EPS of $0.58 versus consensus estimate of $0.47.For the current fiscal year, Cheesecake Factory is expected to post earnings of $3.69 per share on $3.57 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $4.03 per share on $3.76 billion in revenues. This represents a year-over-year change of 11.49% and 5.16%, respectively.Valuation MetricsCheesecake Factory may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.Cheesecake Factory has a Value Score of B. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.In terms of its value breakdown, the stock currently trades at 14.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 24X. On a trailing cash flow basis, the stock currently trades at 12X versus its peer group's average of 11.5X. Additionally, the stock has a PEG ratio of 1.27. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.Zacks RankWe also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Cheesecake Factory currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Cheesecake Factory fits the bill. Thus, it seems as though Cheesecake Factory shares could still be poised for more gains ahead.How Does CAKE Stack Up to the Competition?Shares of CAKE have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is El Pollo Loco Holdings, Inc. (LOCO). LOCO has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of C.Earnings were strong last quarter. El Pollo Loco Holdings, Inc. beat our consensus estimate by 23.53%, and for the current fiscal year, LOCO is expected to post earnings of $0.95 per share on revenue of $471.87 million.Shares of El Pollo Loco Holdings, Inc. have gained 1.9% over the past month, and currently trade at a forward P/E of 12.42X and a P/CF of 9.7X.The Retail - Restaurants industry is in the top 20% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CAKE and LOCO, even beyond their own solid fundamental situation.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them 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 Report El Pollo Loco Holdings, Inc. (LOCO): 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