Shake Shack (SHAK) AI Stock Analysis

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Shake Shack

(NYSE:SHAK)

Rating:66Neutral

Price Target:

$121.00

▲(14.54% Upside)

Shake Shack's overall stock score is driven by strong financial performance and a positive earnings call, indicating effective growth strategies and operational improvements. However, technical analysis shows bearish momentum, and the high P/E ratio suggests overvaluation, which tempers the overall score.

Positive Factors

Financial performance

Shake Shack's second-quarter EPS rose 60%, well above estimates, reflecting significant financial performance improvement.

Marketing and brand awareness

The company recently launched its first paid media campaign and expects the incremental investment to boost brand awareness and engagement.

Product innovation

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

Negative Factors

Investor expectations

Results did not meet high investor expectations with shares trading near peak valuation over the last 3 years.

Risk/reward profile

The risk/reward profile is considered skewed to the downside due to high current valuations.

Valuation concerns

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

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

Market Cap

$4.71B

Dividend YieldN/A

Average Volume (3M)1.49M

Price to Earnings (P/E)232.8

Beta (1Y)1.33

Revenue Growth13.13%

EPS Growth-25.05%

CountryUS

Employees12,826

SectorConsumer Cyclical

Sector Strength75

IndustryRestaurants

Share Statistics

EPS (TTM)0.44

Shares Outstanding40,247,757

10 Day Avg. Volume2,616,038

30 Day Avg. Volume1,489,525

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.30

Enterprise Value/Revenue4.78

Enterprise Value/Gross Profit15.18

Enterprise Value/Ebitda49.02

Forecast

1Y Price Target

$134.53

Price Target Upside27.35% 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: -25.03%|

Next Earnings Date:Oct 30, 2025

Earnings Call Sentiment Positive

The earnings call reflected a positive outlook with strong growth in revenue, adjusted EBITDA, and same-Shack sales. The company showed significant progress in expanding restaurant-level margins and strategic expansion plans. While there were challenges such as beef cost inflation and traffic declines earlier in the year, the improvements in July and strategic marketing initiatives indicate a positive trajectory.

Q2-2025 Updates

Positive Updates

Strong Same-Shack Sales Growth

In the second quarter, Shake Shack achieved 1.8% same-Shack sales growth, with an improvement to 3.2% in July. This was driven by culinary innovation, targeted marketing, and operational improvements.

Expansion of Restaurant-Level Margins

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

Significant Revenue Growth

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

Record-High Adjusted EBITDA

Shake Shack reported a 24.8% year-over-year growth in adjusted EBITDA to $58.9 million, representing 16.5% of total revenue, the highest second quarter margin since 2018.

Expansion Plan on Track

Shake Shack opened 13 new domestic company-operated Shacks in the second quarter and remains on track to open 45 to 50 company-operated Shacks in 2025, the largest class in company history.

Introduction of Paid Media Campaigns

Shake Shack embarked on a paid media campaign for the Dubai Shake and Dollar Soda promotion, marking a new era of marketing strategy for the brand.

Negative Updates

Beef Cost Inflation

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

Traffic Challenges in Early 2025

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

Continued Underperformance in New York and Northeast Regions

New York City and Northeast regions continued to underperform in terms of comp contribution compared to other regions, despite high AUV and margins.

Company Guidance

During Shake Shack's second quarter 2025 earnings call, the company reported a solid performance with total revenue reaching $356.5 million and system-wide sales growing 13.7% year-over-year to $549.9 million. The company opened 22 new Shacks system-wide and achieved positive same-Shack sales growth of 1.8% in the second quarter, with a further increase to 3.2% in July. Restaurant-level margin expanded by nearly 200 basis points year-over-year to approximately 24%, marking the highest margin in the last 24 quarters. The company also raised its adjusted EBITDA guidance for the full year, reflecting confidence in their strategic plan and execution. Looking ahead, Shake Shack plans to open 45 to 50 company-operated Shacks in 2025 and anticipates growing new units system-wide by at least a mid-teens percent in 2026. Despite macroeconomic challenges, the company remains focused on culinary innovation, operational improvements, and marketing strategies to drive sustained growth and long-term shareholder value.

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

Positive

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

Positive

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

Positive

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
EBITDA	125.18M	120.89M	111.74M	51.53M	44.48M	5.58M
Net Income	12.41M	10.21M	20.26M	-25.97M	-10.11M	-45.53M
Balance Sheet
Total Assets	1.73B	1.70B	1.61B	1.49B	1.46B	1.15B
Cash, Cash Equivalents and Short-Term Investments	312.92M	320.71M	293.21M	311.23M	302.41M	183.76M
Total Debt	834.63M	809.62M	771.33M	714.05M	686.19M	384.98M
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

Negative

Last Price105.64

Price Trends

50DMA

129.46

Negative

100DMA

114.32

Negative

200DMA

116.41

Negative

Market Momentum

MACD

-7.31

Positive

RSI

30.49

Neutral

STOCH

18.42

Positive

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 105.64 is below the 20-day moving average (MA) of 122.58, below the 50-day MA of 129.46, and below the 200-day MA of 116.41, indicating a bearish trend. The MACD of -7.31 indicates Positive momentum. The RSI at 30.49 is Neutral, neither overbought nor oversold. The STOCH value of 18.42 is Positive, 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 (56)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAKE	77 Outperform	$3.11B	19.19	41.01%	1.70%	4.77%	38.24%
FWRG	68 Neutral	$1.09B	273.09	0.69%	―	14.53%	-83.26%
PTLO	68 Neutral	$580.18M	16.86	7.36%	―	3.62%	17.67%
SHAK	66 Neutral	$4.71B	232.85	4.16%	―	13.13%	-25.05%
WEN	60 Neutral	$1.93B	10.55	99.35%	8.44%	1.31%	-1.46%
Sector *	56 Neutral	HK$25.46B	5.05	-2.69%	5.69%	-0.43%	-53.15%
SG	44 Neutral	$1.08B	―	-21.95%	―	5.74%	-1.95%

* Consumer Cyclical Sector Average

Performance Comparison

SHAK

Shake Shack

105.64

-1.73

-1.61%

CAKE

Cheesecake Factory

63.37

26.93

73.90%

WEN

Wendy's

10.55

-5.44

-34.02%

FWRG

First Watch Restaurant Group

17.86

1.34

8.11%

PTLO

Portillo's

7.70

-4.36

-36.15%

Sweetgreen

9.15

-28.22

-75.52%

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.

The most recent analyst rating on (SHAK) stock is a Sell with a $120.00 price target. To see the full list of analyst forecasts on Shake Shack stock, see the SHAK Stock Forecast page.

Executive/Board ChangesShareholder Meetings

Shake Shack Stockholders Vote on Key Proposals

Positive

Jun 4, 2025

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.

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: Aug 11, 2025