Shake Shack (SHAK) AI Stock Analysis

• Market Cap: $5.71B
• Dividend Yield: N/A
• Average Volume (3M): 1.04M
• Price to Earnings (P/E): 465.4
• Beta (1Y): 1.24
• Revenue Growth: 14.07%
• EPS Growth: -47.47%
• Country: US
• Employees: 12,826
• Sector: Consumer Cyclical
• Sector Strength: 71
• Industry: Restaurants
• EPS (TTM): 0.14
• Shares Outstanding: 40,221,660
• 10 Day Avg. Volume: 851,847
• 30 Day Avg. Volume: 1,040,460
• PEG Ratio: 18.60
• Price to Book (P/B): 11.70
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 139.14
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 1.23
• Enterprise Value/Gross Profit: 14.91
• Enterprise Value/Ebitda: 12.43
• 1Y Price Target: $131.06
• Price Target Upside: -1.99% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 19

• Rating: 70 Outperform
• Price Target: $155.00 ▲(15.91%Upside)

Shake Shack's overall stock score is driven by strong financial growth and strategic expansion plans, as highlighted in the earnings call. However, the high P/E ratio suggests overvaluation, and technical indicators point to potential short-term pullbacks. Despite these concerns, the company's robust cash flow management and strategic priorities position it well for long-term growth.

Positive Factors

Brand 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.

Menu Innovation

The company has introduced menu innovations, such as the Dubai Chocolate Shake and expanded Summer BBQ offerings, which could drive growth.

Same-Store Sales Trends

Foot traffic data and card data show improvements, contributing to a positive view on same-store sales trends.

Negative Factors

Guest Frequency Challenges

There is less confidence that guest frequency will accelerate in the current environment, which challenges further multiple expansion.

Traffic Growth Concerns

Traffic growth remains elusive, partly due to its low-teens unit growth.

Valuation Concerns

SHAK is trading at a high valuation compared to its historical average, which may limit future stock upside.

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. Overall, Shake Shack presents a solid financial position with opportunities to improve profitability and leverage management.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.25B	1.09B	900.49M	739.89M	522.87M
Gross Profit	573.92M	398.39M	381.54M	306.52M	212.72M
EBITDA	120.89M	111.74M	51.53M	44.48M	5.58M
Net Income	10.21M	20.26M	-25.97M	-10.11M	-45.53M
Balance Sheet
Total Assets	1.70B	1.61B	1.49B	1.46B	1.15B
Cash, Cash Equivalents and Short-Term Investments	320.71M	293.21M	311.23M	302.41M	183.76M
Total Debt	809.62M	771.33M	714.05M	686.19M	384.98M
Total Liabilities	1.20B	1.14B	1.08B	1.02B	710.86M
Stockholders Equity	470.02M	443.42M	395.12M	435.60M	407.32M
Cash Flow
Free Cash Flow	35.66M	-14.03M	-65.82M	-43.09M	-31.69M
Operating Cash Flow	171.16M	132.14M	76.74M	58.40M	37.35M
Investing Cash Flow	-66.08M	-132.32M	-143.42M	-144.89M	-69.40M
Financing Cash Flow	-9.02M	-5.68M	-5.20M	242.02M	141.82M

Shake Shack Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 133.72
• 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 Neutral. The current price of 133.72 is below the 20-day moving average (MA) of 138.28, above the 50-day MA of 130.24, and above the 200-day MA of 115.71, indicating a neutral trend. The MACD of 1.62 indicates Positive momentum. The RSI at 48.45 is Neutral, neither overbought nor oversold. The STOCH value of 28.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	$3.24B	21.51	46.60%	1.65%	4.42%	48.23%
PTLO	72 Outperform	$787.81M	24.36	7.37%	―	4.57%	6.89%
SHAK	70 Outperform	$5.71B	465.44	2.70%	―	14.07%	-47.47%
WEN	68 Neutral	$2.05B	12.08	90.40%	8.34%	2.18%	-5.15%
FWRG	68 Neutral	$1.12B	105.28	1.86%	―	14.43%	-53.71%
Sector *	67 Neutral	¥269.51B	13.47	6.45%	2.58%	5.22%	-11.97%
SG	63 Neutral	$1.68B	―	-19.79%	―	11.10%	18.05%

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.