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CAKE or BROS: Which Is the Better Value Stock Right Now?

By Zacks Equity Research | October 17, 2025, 11:40 AM

Investors interested in stocks from the Retail - Restaurants sector have probably already heard of Cheesecake Factory (CAKE) and Dutch Bros (BROS). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, Cheesecake Factory is sporting a Zacks Rank of #2 (Buy), while Dutch Bros has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CAKE is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

CAKE currently has a forward P/E ratio of 14.41, while BROS has a forward P/E of 80.59. We also note that CAKE has a PEG ratio of 1.29. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BROS currently has a PEG ratio of 2.65.

Another notable valuation metric for CAKE is its P/B ratio of 6.74. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BROS has a P/B of 10.76.

Based on these metrics and many more, CAKE holds a Value grade of A, while BROS has a Value grade of D.

CAKE is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CAKE is likely the superior value option right now.

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The Cheesecake Factory Incorporated (CAKE): Free Stock Analysis Report
 
Dutch Bros Inc. (BROS): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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