The shopping mall experience is not what it used to be. With the rise of dead malls, dying malls, and e-commerce hitting from all sides, that experience many of us remember from the 1980s, 1990s, and even 2000s is not what it once was. But there are signs it is changing, and restaurant chain Cheesecake Factory (CAKE) is helping—and being helped by—this development. Cheesecake Factory shares got a little sweeter in Thursday afternoon’s trading, up nearly 2.5%.
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The report from CNBC starts out by noting what we have all seen for years: the mall is not what it used to be. But it is, in many places, changing: more and more malls are giving more square footage to restaurants and bars, hoping that shoppers will take a turn around the mall and buy a few things after dinner.
This is shifting the food court away from being snacks and fast food to full-on restaurant space. There are still some differences, like the Cheesecake Factory, but the restaurants with something to offer that is unique and distinctive are winning the most attention. And, with recent reports noting that Gen Z is increasingly in favor of the physical shopping experience, the end result is that mall-facing restaurants are starting to make gains.
Further Gains Afoot
That combination of factors suggests good times ahead for Cheesecake Factory and its investors, despite some remaining concerns over soaring inflation and a limping economy full of job cuts. One report noted that Cheesecake Factory’s strong third quarter delivered a real win for the company, and for its stock by extension.
The third quarter brought four new restaurants opened, which will contributed to an expected 22 openings for the entirety of fiscal 2024, reports noted. Further, fiscal year 2025 is expected to see 24 new restaurants opened as well, perhaps even in malls, as the Gen Z physical product shift gains traction.
Is CAKE Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on CAKE stock based on six Buys, five Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 44.44% rally in its share price over the past year, the average CAKE price target of $49.92 per share implies 2.72% upside potential.
