Shake Shack (SHAK) AI Stock Analysis

• Market Cap: $6.03B
• Dividend Yield: N/A
• Average Volume (3M): 1.28M
• Price to Earnings (P/E): 491.7
• Beta (1Y): 1.24
• Revenue Growth: 14.07%
• EPS Growth: -47.47%
• Country: US
• Employees: 12,826
• Sector: Consumer Cyclical
• Sector Strength: 56
• Industry: Restaurants
• EPS (TTM): 0.14
• Shares Outstanding: 40,221,660
• 10 Day Avg. Volume: 1,359,299
• 30 Day Avg. Volume: 1,276,311
• 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: 0.36
• Enterprise Value/Revenue: 0.44
• Enterprise Value/Gross Profit: 5.33
• Enterprise Value/Ebitda: 4.44
• 1Y Price Target: $127.23
• Price Target Upside: -9.93% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 70 Outperform
• Price Target: $155.00 ▲(9.73%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.

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.

Pipeline Expansion

A licensing deal with PENN aims to open approximately 10 new units in casinos, expanding the company's pipeline and reach.

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. 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 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
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	824.11M	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: Positive
• Last Price: 141.26
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 141.26 is above the 20-day moving average (MA) of 131.41, above the 50-day MA of 117.29, and above the 200-day MA of 113.20, indicating a bullish trend. The MACD of 6.09 indicates Negative momentum. The RSI at 70.92 is Negative, neither overbought nor oversold. The STOCH value of 93.25 is Negative, 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	$3.23B	20.49	46.60%	1.65%	4.42%	48.23%
PTLO	74 Outperform	$899.28M	28.34	7.37%	―	4.57%	6.89%
SHAK	70 Outperform	$6.03B	491.68	2.70%	―	14.07%	-47.47%
FWRG	69 Neutral	$1.07B	100.80	1.86%	―	14.43%	-53.71%
WEN	67 Neutral	$2.24B	12.44	90.40%	4.80%	2.18%	-5.15%
Sector *	62 Neutral	$16.76B	11.38	-7.38%	2.96%	1.59%	-23.30%
SG	58 Neutral	$1.69B	―	-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.

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.