What Is The Likelihood Of Cheesecake Factory’s Stock Rising?

by Trefis Team
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The Cheesecake Factory stock (NASDAQ: CAKE) has fallen 4.9% over the last five trading days after the company announced that it plans to offer $300 million of convertible senior notes due 2026 and $175 million of common stock. In comparison the broader S&P500 fell by 0.5% over the last five trading days. Will the company resume an upward trajectory over the coming weeks, or will the fall in the stock continue? According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price using multiple years of historical stock data, returns for CAKE’s stock average around 2.9% in the next one-month (twenty-one trading days) period after experiencing a 4.9% fall in a week (five trading days). But how would these numbers change if you are interested in holding CAKE stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test The Cheesecake Factory stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

MACHINE LEARNING ENGINE – try it yourself:

IF CAKE stock moved by -5% over 5 trading days, THEN over the next 21 trading days, CAKE stock moves an average of 2.9 percent with a 62.2% probability of a positive return over this period.

 

Some Fun Scenarios, FAQs & Making Sense of The Cheesecake Factory Stock Movements

Question 1: Is the average return for The Cheesecake Factory stock higher after a drop?

Answer:

Case 1: The Cheesecake Factory stock drops by -5% or more in a week

Case 2: The Cheesecake Factory stock rises by 5% or more in a week

Is the average return for The Cheesecake Factory stock higher over the subsequent month after Case 1 or Case 2?

CAKE stock fares better after Case 1, with an average return of 2.9% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 2.2% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how The Cheesecake Factory stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer:

If you buy and hold The Cheesecake Factory stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For CAKE stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for The Cheesecake Factory after a larger loss over the last week, month, or quarter.

Question 3: What about the average return after a rise if you wait for a while?

Answer:

The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks.

CAKE’s returns over the next N days after a 5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for The Cheesecake Factory stock by changing the inputs in the charts above.

While The Cheesecake Factory stock may have moved, it is helpful to see how its peers stack up. Check out The Cheesecake Factory Peer Comparisons to see how The Cheesecake Factory compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.

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