Shake Shack (SHAK) AI Stock Analysis

• Market Cap: $5.47B
• Dividend Yield: N/A
• Average Volume (3M): 1.42M
• Price to Earnings (P/E): 430.6
• Beta (1Y): 1.24
• Revenue Growth: 14.07%
• EPS Growth: -47.47%
• Country: US
• Employees: 12,826
• Sector: Consumer Cyclical
• Sector Strength: 57
• Industry: Restaurants
• EPS (TTM): 0.14
• Shares Outstanding: 40,221,660
• 10 Day Avg. Volume: 1,304,057
• 30 Day Avg. Volume: 1,420,742
• PEG Ratio: -0.42
• Price to Book (P/B): 4.23
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -25.37
• Enterprise Value/Market Cap: 0.39
• Enterprise Value/Revenue: 0.44
• Enterprise Value/Gross Profit: 5.33
• Enterprise Value/Ebitda: 4.44
• 1Y Price Target: $114.60
• Price Target Upside: -10.58% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

• Rating: 73 Outperform
• Price Target: $142.00 ▲(10.80%Upside)

Shake Shack's overall stock score reflects strong growth potential and positive earnings call insights, counterbalanced by its high valuation and profitability pressures. The company's strategic expansion and operational improvements are promising, but macroeconomic challenges and a high P/E ratio pose notable risks.

Positive Factors

Brand reach and expansion

Shake Shack is considered one of the premier better burger concepts in the restaurant industry, with the potential to expand its brand reach far beyond its current footprint.

New unit growth

Shake Shack's unit growth is among the industry's best, with new unit returns remaining strong, which is well above the company's cost of capital.

Restaurant level margin expansion

Shake Shack has plenty of opportunity to expand restaurant level margin, with increased digital adoption and a new labor model leading to margin expansion.

Negative Factors

Profitability risks

Margin risks are considered underappreciated, making the risk/reward ratio unfavorable as the focus shifts to profitability.

Traffic growth challenges

Despite strong unit growth, Shake Shack faces challenges with elusive traffic growth and a competitive market share battle against scaled national chains.

Valuation concerns

Shares are viewed as fairly valued, with a breach of the $125 price target, making further multiple expansion feel like a stretch.

Shake Shack Business Overview & Revenue Model

Company Description

Shake Shack Inc. (SHAK) is a modern-day 'roadside' burger stand known for its premium offerings of burgers, chicken sandwiches, hot dogs, crinkle-cut fries, frozen custard, and a variety of beverages. Founded in 2004 and headquartered in New York City, Shake Shack operates in the fast-casual dining sector, with locations primarily in the United States and select international markets. The brand emphasizes high-quality ingredients, responsible sourcing, and a welcoming community atmosphere.

How the Company Makes Money

Shake Shack generates revenue primarily through the sale of food and beverages at its company-operated restaurants. Key revenue streams include dine-in and take-out services, with a growing emphasis on digital orders through their mobile app and website. Additionally, Shake Shack earns income from licensing agreements with international partners, allowing the brand to expand in overseas markets. Factors contributing to its earnings include strategic location selection, a strong brand identity, and an emphasis on quality and customer experience. The company's financial performance is influenced by consumer trends, real estate costs, and competitive dynamics in the fast-casual dining industry.

Shake Shack Financial Statement Overview

Summary

Shake Shack exhibits strong growth dynamics and effective cash flow management. While revenue growth and gross margins are commendable, net profitability and leverage require attention. The balance sheet is stable, but the company could benefit from enhancing its return on equity.

Income Statement

Shake Shack has shown consistent revenue growth, with a TTM (Trailing-Twelve-Months) revenue increase of 2.43% compared to the previous annual period. The gross profit margin remains strong at 44.95%, indicating effective cost management. However, net profit margins are relatively low at 0.97%, suggesting pressure on profitability. The EBIT margin is modest at 0.85%, but the EBITDA margin of 9.60% reflects better operational efficiency. Overall, the income statement shows healthy growth but with tight profitability margins.

Balance Sheet

Shake Shack's balance sheet reflects a stable equity position with an equity ratio of 27.40%, indicating a balanced approach to financing assets. The debt-to-equity ratio stands at 1.73, which is manageable yet signals a moderate level of leverage. Return on equity (ROE) is low at 2.62%, pointing to challenges in generating substantial returns for shareholders. The balance sheet is stable but indicates room for improvement in profitability and leverage management.

Cash Flow

The company has demonstrated strong cash flow management, with an operating cash flow to net income ratio of 13.83, highlighting robust cash generation capabilities. Free cash flow has shown positive growth, increasing by 11.94% in the TTM period, reflecting effective control over capital expenditures. The free cash flow to net income ratio is 3.22, indicating efficient cash utilization. Overall, the cash flow statement shows excellent cash generation and reinvestment strategies.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.28B	1.25B	1.09B	900.49M	739.89M	522.87M
	Gross Profit
404.22M	573.92M	398.39M	381.54M	306.52M	212.72M
	EBIT
10.90M	3.04M	5.92M	-20.34M	-14.13M	-34.51M
	EBITDA
125.18M	120.89M	111.74M	51.53M	44.48M	5.58M
	Net Income Common Stockholders
12.41M	10.21M	20.26M	-25.97M	-10.11M	-45.53M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
312.92M	320.71M	293.21M	311.23M	302.41M	183.76M
	Total Assets
1.73B	1.70B	1.61B	1.49B	1.46B	1.15B
	Total Debt
824.11M	809.62M	771.33M	714.05M	686.19M	384.98M
	Net Debt
511.19M	488.91M	546.68M	483.53M	383.78M	238.10M
	Total Liabilities
1.23B	1.20B	1.14B	1.08B	1.02B	710.86M
	Stockholders Equity
473.32M	470.02M	443.42M	395.12M	435.60M	407.32M
Cash Flow		Free Cash Flow
39.91M	35.66M	-14.03M	-65.82M	-43.09M	-31.69M
	Operating Cash Flow
171.71M	171.16M	132.14M	76.74M	58.40M	37.35M
	Investing Cash Flow
-106.74M	-66.08M	-132.32M	-143.42M	-144.89M	-69.40M
	Financing Cash Flow
-12.26M	-9.02M	-5.68M	-5.20M	242.02M	141.82M

Shake Shack Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 128.16
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHAK, the sentiment is Positive. The current price of 128.16 is above the 20-day moving average (MA) of 124.09, above the 50-day MA of 104.63, and above the 200-day MA of 111.09, indicating a neutral trend. The MACD of 5.75 indicates Positive momentum. The RSI at 58.11 is Neutral, neither overbought nor oversold. The STOCH value of 39.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SHAK.

Shake Shack Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAKE	74 Outperform	$2.85B	18.09	46.60%	1.87%	4.42%	48.23%
SHAK	73 Outperform	$5.47B	430.60	2.70%	―	14.07%	-47.47%
PTLO	73 Outperform	$878.33M	27.42	7.37%	―	4.57%	6.89%
WEN	66 Neutral	$2.20B	12.25	90.40%	4.90%	2.18%	-5.15%
Sector *	63 Neutral	$6.94B	11.34	2.80%	4.26%	2.68%	-24.70%
SG	61 Neutral	$1.54B	―	-19.79%	―	11.10%	18.05%
FWRG	58 Neutral	$969.18M	90.87	1.86%	―	14.43%	-53.71%

Shake Shack Corporate Events

Shake Shack Stockholders Vote on Key Proposals

At its annual meeting on June 4, 2025, Shake Shack Inc. stockholders voted on three key proposals. They elected Daniel Meyer, Jeff Flug, and Lori George as Class I directors to serve until 2028, ratified Ernst & Young LLP as the independent public accounting firm for 2025, and approved the compensation of named executive officers, indicating strong shareholder support for the company’s leadership and financial oversight.

The most recent analyst rating on (SHAK) stock is a Hold with a $123.00 price target. To see the full list of analyst forecasts on Shake Shack stock, see the SHAK Stock Forecast page.

Shake Shack Reports Strong Q1 2025 Financial Results

On May 1, 2025, Shake Shack reported its financial results for the first quarter of 2025, showing a 10.5% increase in total revenue to $320.9 million compared to the previous year. The company also reported an operating income of $2.8 million, a significant improvement from the previous year’s break-even point, and a net income of $4.5 million, doubling from 2024. Shake Shack opened four new company-operated locations and seven licensed ones, indicating continued expansion. These results reflect a positive trajectory for Shake Shack, enhancing its market position and potentially benefiting stakeholders.

Shake Shack Director Anna Fieler Resigns

On April 22, 2025, Anna Fieler announced her resignation from Shake Shack Inc.’s Board of Directors and as a Class I director, effective immediately before the 2025 Annual Meeting of Stockholders. Her departure, which is not due to any disagreement with the company, will result in the Board reducing its size from ten to nine directors, maintaining a balance of three directors in each class.