ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The Cheesecake Factory's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 7.15%.
As of today (2026-06-25), The Cheesecake Factory's WACC % is 7.86%. The Cheesecake Factory's ROC % is 7.31% (calculated using TTM income statement data).
The Cheesecake Factory earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The Cheesecake Factory (STU:CF2) ROC % Explanation
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, The Cheesecake Factory's WACC % is 7.86%. The Cheesecake Factory's ROC % is 7.31% (calculated using TTM income statement data).
The Cheesecake Factory earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
The Cheesecake Factory (STU:CF2) has a ROC % of 7.15% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on The Cheesecake Factory and its competitors.
Is The Cheesecake Factory's ROC % too high?
The Cheesecake Factory's current ROC % is 7.15%. The Restaurants industry median ROC % is 4.21. The Cheesecake Factory's value of 7.15% is 69.8% above this industry median. Overall, The Cheesecake Factory has a GF Score™ of 72/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does The Cheesecake Factory's ROC % compare to SHAK and WING?
The Cheesecake Factory's ROC % of 7.15% can be compared against companies in the Restaurants industry. The industry median ROC % is 4.21. The Cheesecake Factory's value of 7.15% is 69.8% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Restaurants company?
The median ROC % among Restaurants companies is 4.21, based on 359 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. The Cheesecake Factory's current ROC % of 7.15% is 69.8% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on The Cheesecake Factory and its competitors. For the Restaurants industry, the median ROC % is 4.21 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. The Cheesecake Factory's current ROC % is 7.15%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is The Cheesecake Factory stock overvalued right now?
Based on GuruFocus' analysis, The Cheesecake Factory (STU:CF2) is currently considered Significantly Overvalued. The stock's GF Value™ is €42.39, compared to a current price of €68.64 — trading 61.9% above its estimated fair value. The current ROC % is 7.15% and 69.8% above the Restaurants industry median of 4.21. The Cheesecake Factory's overall GF Score™ is 72/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For The Cheesecake Factory (STU:CF2), the current ROC % is 7.15% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is The Cheesecake Factory (STU:CF2) Overvalued in 2026?
Based on GuruFocus' analysis, The Cheesecake Factory stock appears to be overvalued.
The current stock price of €68.64 is trading 61.9% above its estimated GF Value™ of €42.39.
GuruFocus considers The Cheesecake Factory to be Significantly Overvalued.
Key valuation signals for STU:CF2:
ROC %: 7.15%
GF Value™: €42.39 vs. price of €68.64 (61.9% above fair value)
Industry Position: 69.8% above the Restaurants median
No single metric tells the full story. See the STU:CF2 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
The Cheesecake Factory Inc is a restaurant company that owns and operates multiple casual dining brands across the United States and Canada under brands that include The Cheesecake Factory, North Italia, Flower Child, and additional brands within its Fox Restaurant Concepts portfolio. The company's international presence, in the Middle East and Mexico, is through licensing agreements with third parties. The company also has a bakery division that produces cheesecakes and other baked products for sale in its restaurants, international licensees, and third-party bakery customers. The company has four operating business segments: The Cheesecake Factory restaurants, North Italia, Other FRC, and Other. The majority of the company's revenue comes from the Cheesecake Factory restaurants segment.
72GF Score
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