Investors are hoping that Cheesecake Factory (Nasdaq: CAKE) will top analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings on Wednesday, July 20. The Cheesecake Factory operates 161 upscale, full-service casual dining restaurants under The Cheesecake Factory, Grand Lux Cafe, and RockSugar Pan Asian Kitchen brands.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Cheesecake Factory -- 15 of 25 analysts rate it a hold. Analysts don't like Cheesecake Factory as much as competitor P.F. Chang's China Bistro overall. Twelve out of 22 analysts rate P.F. Chang's China Bistro a buy compared to 10 of 25 for Cheesecake Factory. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $434.8 million in revenue this quarter. That would represent a rise of 3.8% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of 42 cents per share. Estimates range from 40 cents to 43 cents.

What our community says:
CAPS All Stars are solidly behind the stock with 88.9% granting it an "outperform" rating. The community at large backs the All Stars with 77.4% giving it a rating of "outperform." Fools are bullish on Cheesecake Factory and haven't been shy with their opinions lately, logging 307 posts in the past 30 days. Cheesecake Factory's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Cheesecake Factory's revenue has now gone up for three straight quarters. Let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters. 

Quarter Q1 Q4 Q3 Q2
Gross Margin 75% 73.7% 75.6% 75.5%
Operating Margin 7.1% 7.4% 7.5% 8.9%
Net Margin 4.9% 5.2% 5.2% 4.6%

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