Share count
49Mpeak FY2023
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CAKE, Cheesecake Factory Incorporated (The)
Cheesecake Factory Incorporated is a leader in experiential dining.
As of February 23, 2026, we owned and operated 368 restaurants throughout the United States and Canada under brands including The Cheesecake Factory (216 locations), North Italia (48 locations), Flower Child (43 locations) and additional brands within our Fox Restaurant Concepts ("Other FRC") portfolio (55 locations).
Our bakery division operates two facilities that produce quality cheesecakes and other baked products for our restaurants, international licensees and third-party bakery customers.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2025
$3.8B
+9.1% YoY · 9% 5-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue $3.8B 5-yr avg $3.1B
Revenue $979M +5.6% vs yr-ago qtr
Operating margin 5.6% yr-ago 5.6%
Net income $50M yr-ago $33M
Net margin 5.1% yr-ago 3.6%
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What it is
- Revenue is led by The Cheesecake Factory restaurants (72%) and Other (10%), with 2 more segments behind.
- Situation
- Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
- What moves the needle
- Gross margin has run about 77% and operating margin about 3.2% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. The operating margin has swung widely — from −18% to 8.8% — on a steadier 77% gross margin, so what moves it sits below the gross line, in operating spend and one-off charges more than in the cost of the product itself. Read this kind of business on same-store sales and unit economics. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has run in the teens (median 13%, above 15% in 3 of 8 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 5% of revenue reaches owners as cash, consistently, and customers and suppliers fund the business through negative working capital. Returns like these are solid but short of clear franchise economics; whether they hold is what the 10-K settles, not the multiple.
Every line is arithmetic on the company's filings, shown in full in the sections below.
Where the money comes from
read the 10-K →The Cheesecake Factory restaurants is 72% of revenue, with Other the other meaningful segment at 10%.
Revenue by reportable segment, FY2025
- The Cheesecake Factory restaurants72%$2.7B
- Other10%$362M
- Other FRC9%$355M
- North Italia9%$346M
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2017–2025
realized figures from each filing · older years to the left| 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|
| Income statement | |||||||||
| $2.3B | $2.3B | $2.5B | $2.0B | $2.9B | $3.3B | $3.4B | $3.8B | $3.8B | RevenueRevenue |
| 77% | 77% | 77% | 77% | 78% | — | — | — | 80% | Gross marginGross mgn |
| 6% | 6% | 6% | 8% | 6% | 6% | 6% | 7% | 7% | SG&A / revenueSG&A/rev |
| $201M | $153M | $104M | ($347M) | $82M | $39M | $109M | $187M | $190M | Operating incomeOp. inc. |
| 8.8% | 6.8% | 4.2% | −17.5% | 2.8% | 1.2% | 3.2% | 5.0% | 5.0% | Operating marginOp. mgn |
| $139M | $157M | $127M | ($253M) | $72M | $43M | $101M | $148M | $165M | Net incomeNet inc. |
| 27% | -7% | 9% | — | -1% | — | -1% | 9% | 9% | Effective tax rateTax rate |
| Cash flow & returns | |||||||||
| $316M | $239M | $219M | $3M | $213M | $162M | $218M | $301M | $319M | Operating cash flowOp. cash |
| $88M | $93M | $88M | $91M | $90M | $92M | $93M | $109M | $111M | DepreciationDeprec. |
| $67M | ($28M) | ($16M) | $144M | $28M | $2M | ($2M) | $17M | $16M | Working capital & otherWC & other |
| $116M | $121M | $74M | $50M | $67M | $112M | $152M | $146M | $147M | CapexCapex |
| 5.1% | 5.3% | 3.0% | 2.5% | 2.3% | 3.4% | 4.4% | 3.9% | 3.9% | Capex / revenueCapex/rev |
| $228M | $146M | $145M | ($47M) | $146M | $49M | $125M | $192M | $208M | Owner earningsOwner earn. |
| 10.0% | 6.5% | 5.8% | −2.4% | 5.0% | 1.5% | 3.6% | 5.1% | 5.5% | Owner earnings marginOE mgn |
| $201M | $118M | $145M | ($47M) | $146M | $49M | $67M | $155M | $172M | Free cash flowFCF |
| 8.8% | 5.2% | 5.8% | −2.4% | 5.0% | 1.5% | 1.9% | 4.1% | 4.5% | Free cash flow marginFCF mgn |
| $42M | $50M | $61M | $16M | $337K | $42M | $53M | $52M | $54M | Dividends paidDiv. paid |
| $146M | $123M | $51M | $4M | $6M | $63M | $46M | $154M | — | BuybacksBuybacks |
| 27% | 25% | 12% | -66% | 14% | 6% | 13% | 20% | 20% | ROICROIC |
| 23% | 26% | 22% | -88% | 22% | 15% | 23% | 34% | 36% | Return on equityROE |
| 16% | 18% | 12% | −93% | 22% | 0% | 11% | 22% | 24% | Retained to equityRetained/eq |
| Balance sheet | |||||||||
| $54M | $6M | $58M | $154M | $190M | $115M | $84M | $216M | $235M | Cash & investmentsCash+inv |
| $16M | $20M | $21M | — | — | — | — | — | $26M | ReceivablesReceiv. |
| $35M | $43M | $47M | $39M | $43M | $56M | $65M | $54M | $51M | InventoryInvent. |
| $42M | $51M | $62M | $58M | $54M | $67M | $62M | $63M | $67M | Accounts payablePayables |
| $9M | $11M | $6M | ($19M) | ($11M) | ($11M) | $2M | ($9M) | $10M | Operating working capitalOper. WC |
| $221M | $209M | $245M | $341M | $406M | $346M | $333M | $455M | $465M | Current assetsCur. assets |
| $377M | $398M | $615M | $586M | $636M | $657M | $711M | $777M | $781M | Current liabilitiesCur. liab. |
| 0.6× | 0.5× | 0.4× | 0.6× | 0.6× | 0.5× | 0.5× | 0.6× | 0.6× | Current ratioCurr. ratio |
| — | — | $78M | $1M | $1M | $1M | $1M | $1M | $1M | GoodwillGoodwill |
| $1.3B | $1.3B | $2.8B | $2.7B | $2.8B | $2.8B | $2.8B | $3.3B | $3.3B | Total assetsAssets |
| — | $10M | $290M | $280M | $466M | $468M | $452M | $630M | $631M | Total debtDebt |
| — | $4M | $232M | $126M | $276M | $353M | $368M | $414M | $396M | Net debt / (cash)Net debt |
| $603M | $614M | $572M | $289M | $330M | $292M | $443M | $436M | $459M | Shareholders’ equityEquity |
| 0.9% | 0.7% | 0.8% | 1.1% | 0.8% | 0.7% | 0.7% | 0.7% | 0.7% | Stock comp / revenueSBC/rev |
| Per share | |||||||||
| 49.4M | 48.2M | 44.5M | 43.9M | 48.5M | 50.4M | 49.0M | 48.6M | 48.5M | Shares out (diluted)Shares |
| $46.09 | $46.95 | $55.73 | $45.21 | $60.35 | $65.52 | $70.12 | $77.28 | $78.49 | Revenue / shareRev/sh |
| $2.83 | $3.27 | $2.86 | $-5.78 | $1.49 | $0.86 | $2.07 | $3.06 | $3.41 | EPS (diluted)EPS |
| $4.63 | $3.03 | $3.26 | $-1.08 | $3.01 | $0.98 | $2.55 | $3.96 | $4.30 | Owner earnings / shareOE/sh |
| $4.06 | $2.45 | $3.26 | $-1.08 | $3.01 | $0.98 | $1.36 | $3.19 | $3.56 | Free cash flow / shareFCF/sh |
| $0.86 | $1.04 | $1.36 | $0.36 | $0.01 | $0.84 | $1.08 | $1.07 | $1.11 | Dividends / shareDiv/sh |
| $2.35 | $2.51 | $1.66 | $1.15 | $1.38 | $2.23 | $3.09 | $3.01 | $3.03 | Cap. spending / shareCapex/sh |
| $12.22 | $12.74 | $12.84 | $6.58 | $6.81 | $5.79 | $9.04 | $8.99 | $9.48 | Book value / shareBVPS |
Per-share growththe realized rate an owner's share compounded
| 8-yr | 5-yr | |
|---|---|---|
| Revenue / share | +6.7%/yr | +11.3%/yr |
| Owner earnings / share | −1.9%/yr | — |
| EPS | +1.0%/yr | — |
| Dividends / share | +2.9%/yr | +24.5%/yr |
| Capital spending / share | +3.2%/yr | +21.3%/yr |
| Book value / share | −3.8%/yr | +6.4%/yr |
The record, charted
FY2017–2025Each measure over its full record; the current point and the worst year marked.
ROIC
20%low FY2020
Gross margin
78%low FY2017
Net debt ÷ owner earnings
2.2×peak FY2023
Owner earnings vs. net income
Owner earningsNet incomeThe accountant's number, and the cash an owner can take; the gap is the tell.
$192Mowner earningsvs.$148Mnet incomelow FY2020
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cashEach year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.
FY2017FY2025
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2025 the business earned $192M of owner earnings, the operating cash left after the $109M it takes just to hold its position. It put $37M more into growth; free cash flow, after that spending, was $155M.
| FY2025 | FY2024 | FY2023 | FY2021 | FY2020 | |
|---|---|---|---|---|---|
| Reported net income | $148M | $101M | $43M | $72M | ($253M) |
| Depreciation & amortizationnon-cash charge added back | +$109M | +$93M | +$92M | +$90M | +$91M |
| Stock-based compensationreal costnon-cash, but a real cost | +$27M | +$26M | +$24M | +$23M | +$21M |
| Working capital & othertiming of cash in and out, other non-cash items | +$17M | −$2M | +$2M | +$28M | +$144M |
| Cash from operations | $301M | $218M | $162M | $213M | $3M |
| Maintenance capital expenditurethe spending needed just to hold position and volume | −$109M | −$93M | −$112M | −$67M | −$50M |
| Owner earnings | $192M | $125M | $49M | $146M | ($47M) |
| Growth capital expenditurediscretionary; spent to get bigger, not to stand still | −$37M | −$58M | — | — | — |
| Free cash flow | $155M | $67M | $49M | $146M | ($47M) |
| Owner-earnings marginowner earnings ÷ revenue | 5% | 4% | 1% | 5% | -2% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $109M, roughly its depreciation, the rate its assets wear out). The other $37M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $27M), owner earnings is nearer $165M.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2025 10-K · source on SEC EDGAR →
Will it survive?
- Can it pay its interest? 38.1×ComfortableOperating income $187M ÷ interest expense $5M
What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
- How heavy is the debt, net of cash? $414M · 2.2× operating profitMeaningful net debtCash $216M − debt $630M
What this means
Netting $216M of cash and short-term investments against $630M of debt leaves $414M owed, about 2.2× a year's operating profit (3.4× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Negative, funded by othersDSO 2 + DIO 30 − DPO 35 days
What this means
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money.
Is it a good business?
- Solid through the cycle8-yr median, range -66%–27%; 20% latest = NOPAT $171M ÷ invested capital $851MIndustry peers: median 24%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 8 years (it ran 20% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Solid, recently turned positivelatest $192M = operating cash $301M − maintenance capex $109M; positive each of the last 3 years, after an earlier loss stretch (8-yr median 5%)Industry peers: median 5%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 5% of revenue this year, a 5% median across 8 years. Treating stock comp as the real expense it is (less $27M of SBC) leaves $165M.
- Cash-backedCash from ops $301M ÷ net income $148M
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Returned more than it generatedDividends + buybacks $206M ÷ Owner Earnings $192M
What this means
The company returned more than it generated: against $192M of Owner Earnings, $206M (107%) went back to shareholders, $52M dividends, $154M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $27M stock comp, the real buyback was about $127M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
- Investing or harvesting? 1.34×ExpandingCapex $146M ÷ depreciation $109M
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 2 of 6 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size PassRevenue ≥ $2B · $3.8B
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 0.59×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $630M vs ($322M) WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability NearA profit every year (8-yr record) · 1 loss year
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (8)
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth MissEarnings +33% over the record · −31%
What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $1.97/share (latest year $2.99), the averaged base the calculator's gate runs on, and book value is $8.78/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2017–2025
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 7 of 8
What this means
Lost money in 1 year(s), look at what happened there before trusting the average.
- Return on capital ≥ 15% 2 of 7 yrs
What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 7% → 3% (3-yr avg ends)
In the filing’s words The filing attributes gains to higher prices, but the margin in the record has not followed — the claim outruns the result here.
What this means
Through the cycle the operating margin slipped — about 7% early to 3% lately, median 3% — competition or costs are biting in.
- Reinvestment, incremental ROIC returns capital
What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
- Owner earnings growth −2%/yr
What this means
Owner earnings shrank about 2% a year over the record.
- Worst year 2020 · −17.5% op. margin
What this means
Operations went underwater in 2020, understand why before trusting the good years.
- Share count −0.2%/yr
What this means
Roughly flat share count, little dilution, little buyback.
- Dividend record rising
What this means
Paid and raised the dividend across the record, the continuity Graham prized.
Does AI threaten the moat?
Moderate contestabilityAI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.
In its own filing Named as a competitive risk
Its FY2025 10-K names artificial intelligence as a competitive threat.
“(See the risk factor titled "If any of our third-party vendors experiences a failure that affects a significant aspect of our business, we may experience data loss, increased costs, operational disruption or other harm, any of which could materially adversely affect our financial performance.") Additionally, we have, t…”
The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of the latest quarter, Mar 31, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assets$465M
- Cash & short-term investments$235M
- Receivables$26M
- Inventory$51M
- Other current assets$153M
Current liabilities$781M
- Debt due within a year$69M
- Accounts payable$67M
- Other current liabilities$646M
Current ratio0.59×all current assets ÷ what's due · Graham looked for 2×
Quick ratio0.53×stricter: inventory excluded
Cash ratio0.30×strictest: cash alone against what's due
Working capital($316M)the cushion left after near-term bills
Its current ratio is below 1, which usually reads as strain; here it is likely structural strength. This business collects from customers before it pays suppliers (a negative cash-conversion cycle), so the balance sheet is funded by that float, the way Costco's and Amazon's are. The low ratio can be the edge, not the risk; the cash-conversion cycle and the debt due above say which.
Debt due this year vs. cash$69M due · $235M cash
covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet
Revenue, latest quarter vs. a year ago+5.6%the freshest read on whether the business is still growing
Current ratio, recent quarters0.4× → 0.6×
Deeper floors
Tangible book value$206Mequity stripped of goodwill & intangibles
Net current asset value($2.4B)Graham's net-net: current assets less all liabilities
Debt incl. operating leases$2.1B$1.5B of it operating leases; with finance leases, “total fixed claims” below reaches $2.1B (annual-report basis)
Deferred revenue$188Mcustomer cash collected before delivery; operating float
From the company's latest filing.
Lease obligations
the lease note, SEC EDGAR →Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, and what it adds to the debt on the page above.
Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.
Due in the next 12 months$173Ma fixed cash payment, owed whether or not the business has a good year
Total lease payments$2.3Bevery year plus the tail, undiscounted: the full cash the leases will take
On the balance sheet$1.5Bthe present value of those payments, the recognised lease liability
True leverage: debt plus leases
On-balance-sheet debt$630M
Lease obligations (present value)$1.5B
Total fixed claims on the business$2.1B
Counting the leases the way Buffett does, the fixed claims on this business come to $2.1B, of which the leases are 70%, more than the debt itself. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.
Lease ladder read from the ASC 842 tags in the company’s Dec 30, 2025 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.
How the cash was used, 2017–2025
Over the record, the business generated $1.7B of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.
- Reinvested$838M · 50%
- Dividends$317M · 19%
- Buybacks$593M · 35%
- Returned to owners$910M
92% of the owner earnings the business produced over the span, $317M as dividends and $593M as buybacks.
- Source of funding−$76M
Reinvestment and shareholder returns ran $76M beyond the operating cash the business generated, so the gap was financed off the balance sheet.
- Average price paid for buybacks$53.07
Across the years where the filing reports a share count, 3M shares were bought for $154M, about $53.07 each.
- Net change in share count−1.9%
The diluted count fell from 49M to 48M, so the buybacks outran the stock issued to staff.
- Dividend record$1.07/sh
Paid in 8 of the years on record, the per-share dividend growing about 3% a year. It was cut at least once along the way.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.
| Fiscal year | Chief executive | Pay, as filed | “Actually paid” | Owner earnings |
|---|---|---|---|---|
| 2021 | David Overton | $7.4M | $8.6M | $146M |
| 2023 | David Overton | $7.2M | $3.6M | $49M |
| 2024 | David Overton | $7.7M | $7.4M | $125M |
| 2025 | David Overton | $8.4M | $10.4M | $192M |
Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.
- Insider ownership8%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
- Stock-based compensation$27M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 15% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Inverting the record
Invert: instead of why Cheesecake Factory Incorporated (The) is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2017–2025.
1 of the 5 tests turned up something to look into; the other 4 came back clean.
- Look hereIs it less profitable than it was?3.4% vs 7.4%
The owner-earnings margin averaged 7.4% early in the record and 3.4% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
And these came back clean
- Did the share count rise anyway?
- Did reported profit become cash?
- Did receivables and inventory outpace sales?
- Are "one-time" charges a yearly habit?
Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.
Peers, Restaurants
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| YUMYum! Brands Inc. | $8.2B | 73% | 32.2% | 75% | 20% |
| TXRHTexas Roadhouse | $5.9B | — | 8.0% | 26% | 9% |
| EATBrinker Intl | $5.4B | 74% | 6.6% | 24% | 5% |
| BLMNBloomin' Brands Inc. | $4.0B | 69% | 3.5% | 13% | 3% |
| CAKECheesecake Factory Incorporated (The) | $3.8B | 77% | 3.7% | 13% | 5% |
| CBRLCracker Barrel Old Country Store Inc | $3.5B | 69% | 6.9% | 20% | 5% |
| PLAYDave & Buster's Entertainment Inc. | $2.1B | 83% | 13.0% | 15% | 13% |
| PZZAPapa John's International Inc. | $2.1B | — | 6.0% | 37% | 4% |
| Group median | — | 74% | 6.8% | 22% | 5% |
The price
What a price has to assume.
What the price implies
reverse-DCFType today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Cheesecake Factory Incorporated (The) has delivered.
$
Through the cycle, Cheesecake Factory Incorporated (The) earns about $190M on its 5.1% median owner-earnings margin. This year’s 5.1% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.
Base
—
The assumptions
9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Implied by the price—
Owner-earnings growth · ’20→’25+26%/yr
Owner-earnings growth · ’17→’25−4%/yr
Owner-earnings growth · ’17→’25−2%/yr
Owner-earnings yield—
What a growth belief costs, in multiples
The growth each return requires, at your price
P/E (3-yr earnings ’23–’25)—
P/B—
Graham’s price gate—
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Against a high-grade bond: Graham’s yardstick bond yield%
Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner-earnings yield—
High-grade bond yield—
Margin over the bond—
Free cash flow $172M on 50M shares outstanding, per the 10-Q cover, as of 2026-04-27; net debt $396M. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($147M) runs well above depreciation ($111M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $210M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Cite: Owner Scorecard, "Cheesecake Factory Incorporated (The) (CAKE), the owner's record," https://ownerscorecard.com/c/CAKE, data as of 2026-07-09.
Manual order: ← CAI its page in the Manual CAL →
Industry order: ← BROS the Restaurants chapter CAVA →