Reviewing CAVA Group (NYSE:CAVA) and Cheesecake Factory (NASDAQ:CAKE)

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

Profitability

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

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

Risk and Volatility

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

Insider and Institutional Ownership

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

Earnings and Valuation

This table compares Cheesecake Factory and CAVA Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cheesecake Factory	$3.88 billion	1.36	$148.43 million	$3.69	28.65
CAVA Group	$1.37 billion	4.63	$63.74 million	$0.55	98.92

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.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Cheesecake Factory and CAVA Group, as reported by MarketBeat.com.

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

Cheesecake Factory presently has a consensus target price of $95.47, indicating a potential downside of 9.71%. CAVA Group has a consensus target price of $87.35, indicating a potential upside of 60.55%. Given CAVA Group’s stronger consensus rating and higher possible upside, analysts clearly believe CAVA Group is more favorable than Cheesecake Factory.

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.

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.