Shake Shack (SHAK) AI Stock Analysis

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Shake Shack

(NYSE:SHAK)

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Neutral 57 (OpenAI - 4o)

Rating:57Neutral

Price Target:

$101.00

▲(7.46% Upside)

Shake Shack's overall stock score reflects a mix of strong earnings performance and strategic growth initiatives, tempered by technical weakness and high valuation concerns. The company's robust expansion plans and improved margins are positive, but the stock's current technical and valuation metrics suggest caution.

Positive Factors

Revenue Growth

Shake Shack's consistent revenue growth, driven by new openings and positive sales trends, indicates strong market demand and effective expansion strategies.

Margin Improvement

Improved margins reflect operational efficiency and cost management, enhancing profitability and financial health over the long term.

Expansion Strategy

Aggressive expansion plans demonstrate Shake Shack's commitment to growth and increasing market presence, supporting long-term revenue potential.

Negative Factors

High Leverage

High leverage can strain financial flexibility and increase risk, potentially impacting the company's ability to invest in growth opportunities.

Low Operational Margins

Low operational margins indicate potential inefficiencies, which could limit profitability and require strategic adjustments to improve performance.

Regional Underperformance

Regional underperformance highlights market-specific challenges that could affect overall growth and necessitate targeted strategies to improve results.

Shake Shack (SHAK) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.90B

Dividend YieldN/A

Average Volume (3M)1.21M

Price to Earnings (P/E)202.4

Beta (1Y)1.31

Revenue Growth13.13%

EPS Growth-25.05%

CountryUS

Employees12,826

SectorConsumer Cyclical

Sector Strength84

IndustryRestaurants

Share Statistics

EPS (TTM)0.44

Shares Outstanding40,247,757

10 Day Avg. Volume1,182,390

30 Day Avg. Volume1,212,766

Financial Highlights & Ratios

PEG Ratio-10.51

Price to Book (P/B)11.19

Price to Sales (P/S)4.20

P/FCF Ratio147.49

Enterprise Value/Market Cap1.57

Enterprise Value/Revenue4.64

Enterprise Value/Gross Profit11.69

Enterprise Value/Ebitda44.82

Forecast

1Y Price Target

$122.25

Price Target Upside30.07% Upside

Rating ConsensusHold

Number of Analyst Covering20

Shake Shack Business Overview & Revenue Model

Company DescriptionShake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, hot dogs, chicken, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. As of December 29, 2021, it operated 369 Shacks, including 218 domestic company-operated Shacks, 25 domestic licensed Shacks, and 126 international licensed Shacks. Shake Shack Inc. was founded in 2001 and is headquartered in New York, New York.

How the Company Makes MoneyShake Shack generates revenue primarily through the sale of food and beverage items at its company-operated and franchised locations. The company's core revenue streams include direct sales from its restaurants, which offer a limited but appealing menu that emphasizes quality and freshness. Additionally, Shake Shack earns revenue through franchising agreements, where franchisees pay initial fees and ongoing royalties based on sales. The company has also engaged in partnerships with various food delivery services to expand its reach, allowing customers to order online and increasing sales through delivery channels. Furthermore, Shake Shack occasionally launches limited-time menu items and promotions that drive customer interest and boost revenue during specific periods.

Shake Shack Key Performance Indicators (KPIs)

Any

Restaurant Count

Restaurant Count
Tracks the total number of Shake Shack locations, indicating the company's expansion strategy and market penetration. A growing count suggests aggressive growth plans and potential revenue increase.

Chart InsightsShake Shack's restaurant count has been on a robust upward trajectory, reflecting strategic expansion efforts. The latest earnings call highlights plans to open 45 to 50 new company-operated Shacks in 2025, the largest expansion in its history, signaling confidence in growth potential despite macroeconomic challenges. This aligns with their strong revenue growth and improved margins, driven by culinary innovation and marketing strategies. However, challenges like beef cost inflation and regional underperformance in New York and the Northeast could pose risks to this aggressive expansion strategy.

Data provided by:

Main Street Data

Shake Shack Earnings Call Summary

Earnings Call Date:Jul 31, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Oct 30, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong revenue growth, improved margins, and successful expansion and marketing strategies. Despite facing challenges such as increased beef costs and regional underperformance, the company showed resilience and strategic focus on long-term growth.

Q2-2025 Updates

Positive Updates

Strong Revenue Growth

Total revenue for the second quarter was $356.5 million, supported by 22 new Shack openings system-wide and positive same-Shack sales growth.

Record Adjusted EBITDA

Adjusted EBITDA grew by 24.8% year-over-year to $58.9 million, representing 16.5% of total revenue, marking the highest second-quarter margin since 2018.

Improved Restaurant-Level Margins

Restaurant-level margin expanded by nearly 200 basis points year-over-year to approximately 24%, the highest in the last 24 quarters.

New Shack Openings

Opened 13 new domestic company-operated Shacks in Q2, with a plan to open 45 to 50 company-operated Shacks in 2025, marking the largest class in company history.

Innovative Marketing and Culinary Initiatives

Implemented a paid media component and launched new products like the Dubai Shake. Positive traffic trends with 3.2% same-Shack sales growth in July.

International Expansion and Licensing Success

Strong performance in the licensed business with 9 new openings, including new partnerships with PENN Entertainment and Grupo Attie-Multifood Enterprises.

Negative Updates

Increased Beef Costs

Food and paper costs increased by 40 basis points due to a mid-single-digit increase in beef costs.

Traffic Decline

Traffic was down 70 basis points in Q2, although trends improved throughout the period.

Challenges in the Northeast and New York City

The New York City and Northeast regions reported underperformance in comp growth compared to other regions, despite having high AUV and margins.

Company Guidance

During Shake Shack's second quarter 2025 earnings call, the company raised their adjusted EBITDA guidance for the full year, driven by a strong quarterly performance despite industry headwinds. Shake Shack reported a 1.8% same-Shack sales growth, with trends improving into July to 3.2%. Restaurant-level margins expanded by nearly 200 basis points year-over-year to approximately 24%, the highest in 24 quarters. The company opened 13 new domestic company-operated Shacks during the quarter and remains on track to open 45 to 50 such locations in 2025. They also experienced strong licensed business performance, with revenue growing by 20.2% year-over-year. Total revenue for the quarter was $356.5 million, with system-wide sales increasing by 13.7% to $549.9 million. Shake Shack's strategic focus includes enhancing guest experience, driving operational efficiency, and leveraging culinary innovation to sustain positive sales and margin growth.

Shake Shack Financial Statement Overview

Summary

Shake Shack shows a positive growth trajectory with improving profitability and strong cash flow generation. However, high leverage and low operational margins present potential risks. Continued focus on operational efficiency and debt management could enhance financial stability and performance.

Income Statement

Positive

Shake Shack's income statement shows a positive trajectory with a revenue growth rate of 3.12% TTM, indicating steady expansion. The gross profit margin of 39.68% is healthy, though it has decreased from the previous year. The net profit margin improved to 1.50% TTM, reflecting better profitability. However, the EBIT margin remains low at 2.27%, suggesting room for operational efficiency improvements.

Balance Sheet

Neutral

The balance sheet reveals a high debt-to-equity ratio of 1.70 TTM, indicating significant leverage, which could pose financial risks. Return on equity is modest at 4.20% TTM, showing some profitability but also highlighting potential for improvement. The equity ratio is stable, suggesting a balanced asset structure.

Cash Flow

Positive

Cash flow analysis shows a robust free cash flow growth rate of 15.80% TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio of 0.90 TTM suggests efficient cash conversion. However, the free cash flow to net income ratio of 0.25 TTM indicates room for improvement in cash flow management.

Breakdown	TTM	Dec 2024	Dec 2024	Dec 2023	Dec 2023	Dec 2022
Income Statement
Total Revenue	1.32B	1.25B	1.25B	1.09B	1.09B	900.49M
Gross Profit	524.90M	573.92M	573.92M	398.39M	398.39M	381.54M
EBITDA	136.88M	120.89M	120.89M	111.74M	111.74M	51.53M
Net Income	19.89M	10.21M	10.21M	20.26M	20.26M	-25.97M
Balance Sheet
Total Assets	1.78B	1.70B	1.70B	1.61B	1.61B	1.49B
Cash, Cash Equivalents and Short-Term Investments	336.80M	320.71M	320.71M	293.21M	293.21M	311.23M
Total Debt	837.59M	809.62M	809.62M	771.33M	771.33M	714.05M
Total Liabilities	1.26B	1.20B	1.20B	1.14B	1.14B	1.08B
Stockholders Equity	494.10M	470.02M	470.02M	443.42M	443.42M	395.12M
Cash Flow
Free Cash Flow	46.22M	35.66M	35.66M	-14.03M	-14.03M	-65.82M
Operating Cash Flow	183.16M	171.16M	171.16M	132.14M	132.14M	76.74M
Investing Cash Flow	-133.94M	-66.08M	-66.08M	-132.32M	-132.32M	-143.42M
Financing Cash Flow	-14.25M	-9.02M	-9.02M	-5.68M	-5.68M	-5.20M

Shake Shack Technical Analysis

Technical Analysis Sentiment

Negative

Last Price93.99

Price Trends

50DMA

100.63

Negative

100DMA

116.30

Negative

200DMA

110.35

Negative

Market Momentum

MACD

-3.12

Negative

RSI

45.67

Neutral

STOCH

38.41

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHAK, the sentiment is Negative. The current price of 93.99 is below the 20-day moving average (MA) of 94.66, below the 50-day MA of 100.63, and below the 200-day MA of 110.35, indicating a bearish trend. The MACD of -3.12 indicates Negative momentum. The RSI at 45.67 is Neutral, neither overbought nor oversold. The STOCH value of 38.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SHAK.

Shake Shack Risk Analysis

Shake Shack disclosed 53 risk factors in its most recent earnings report. Shake Shack reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Shake Shack Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NATH	70 Outperform	$439.05M	18.11	-102.54%	1.83%	6.38%	9.98%
PBPB	68 Neutral	$516.55M	48.05	19.65%	―	-1.72%	-70.31%
CAVA	67 Neutral	$7.34B	54.51	20.90%	―	28.21%	227.11%
WEN	63 Neutral	$1.66B	9.09	99.35%	8.74%	1.31%	-1.46%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SHAK	57 Neutral	$3.90B	202.43	4.16%	―	13.13%	-25.05%
JACK	51 Neutral	$335.73M	―	4.15%	8.96%	-6.66%	-71.87%

* Consumer Cyclical Sector Average

Performance Comparison

SHAK

Shake Shack

93.99

-15.45

-14.12%

JACK

Jack In The Box

19.64

-26.00

-56.97%

NATH

Nathan's Famous

109.35

24.28

28.54%

WEN

Wendy's

8.92

-9.99

-52.83%

PBPB

Potbelly

17.10

8.50

98.84%

CAVA

CAVA Group, Inc.

64.71

-69.45

-51.77%

Shake Shack Corporate Events

Business Operations and StrategyFinancial Disclosures

Shake Shack Reports Strong Q2 2025 Financial Results

Positive

Jul 31, 2025

On July 31, 2025, Shake Shack announced its financial results for the second quarter of 2025, reporting a total revenue of $356.5 million, a 12.6% increase from 2024. The company also reported an operating income of $22.4 million, a significant rise from $10.8 million in 2024, and a net income of $18.5 million. Shake Shack opened 13 new company-operated Shacks, including two drive-thrus, and nine new licensed Shacks, enhancing its market presence and operational growth.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 09, 2025