Is Cheesecake Factory, Inc. overvalued or undervalued?

As of 11 August 2025, the valuation grade for Cheesecake Factory, Inc. has moved from attractive to very expensive, indicating a shift towards overvaluation. The company appears to be overvalued based on its high P/E ratio of 32, a Price to Book Value of 17.48, and an EV to EBITDA of 19.47, which are significantly above industry averages. In comparison, Texas Roadhouse, Inc. has a P/E of 24.79 and an EV to EBITDA of 14.80, suggesting that Cheesecake Factory's valuation is not justified relative to its peers.
The stock has shown mixed performance against the S&P 500, with a year-to-date return of 16.19% compared to the index's 12.22%, but it lags behind over longer periods, particularly in the 5-year and 10-year returns. This discrepancy reinforces the notion that while the company has performed well recently, its current valuation may not be sustainable.