Head to Head Contrast: CAVA Group (NYSE:CAVA) versus Cheesecake Factory (NASDAQ:CAKE)

CAVA Group (NYSE:CAVA) and Cheesecake Factory (NASDAQ:CAKE) are both mid-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.

Profitability

This table compares CAVA Group and Cheesecake Factory’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CAVA Group	4.82%	8.28%	4.73%
Cheesecake Factory	4.61%	43.97%	6.18%

Risk and Volatility

CAVA Group has a beta of 1.8, meaning that its share price is 80% more volatile than the S&P 500. Comparatively, Cheesecake Factory has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for CAVA Group and Cheesecake Factory, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CAVA Group	0	10	17	1	2.68
Cheesecake Factory	2	11	4	1	2.22

CAVA Group currently has a consensus target price of $88.62, indicating a potential upside of 61.45%. Cheesecake Factory has a consensus target price of $92.67, indicating a potential downside of 18.99%. Given CAVA Group’s stronger consensus rating and higher possible upside, equities research analysts plainly believe CAVA Group is more favorable than Cheesecake Factory.

Valuation & Earnings

This table compares CAVA Group and Cheesecake Factory”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CAVA Group	$1.18 billion	5.44	$63.74 million	$0.55	99.80
Cheesecake Factory	$3.75 billion	1.52	$148.43 million	$3.69	31.00

Cheesecake Factory has higher revenue and earnings than CAVA Group. Cheesecake Factory is trading at a lower price-to-earnings ratio than CAVA Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

73.2% of CAVA Group shares are owned by institutional investors. Comparatively, 94.5% of Cheesecake Factory shares are owned by institutional investors. 6.7% of CAVA Group shares are owned by insiders. Comparatively, 8.0% of Cheesecake Factory shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

About CAVA Group

CAVA Group, Inc. owns and operates a chain of restaurants under the CAVA brand in the United States. The company also offers dips, spreads, and dressings through grocery stores. In addition, the company provides online and mobile ordering platforms. Cava Group, Inc. was founded in 2006 and is headquartered in Washington, the District of Columbia.

About Cheesecake Factory

The Cheesecake Factory Incorporated operates and licenses restaurants in the United States and Canada. The company operates bakeries that produce cheesecakes and other baked products for its restaurants, international licensees, third-party bakery customers, external foodservice operators, retailers, and distributors. It operates restaurants under the brands comprising The Cheesecake Factory, North Italia, Flower Child, Fox Restaurant Concepts. The Cheesecake Factory Incorporated was founded in 1972 and is headquartered in Calabasas, California.