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Shake Shack (SHAK)
NYSE:SHAK
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Shake Shack
(NYSE:SHAK)
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Rating:58Neutral
Price Target:
$103.00
▲(9.06% Upside)
Action:ReiteratedDate:02/27/26
The score is driven by improving operating results and a generally positive 2026 outlook, but held back by elevated leverage and a high P/E valuation. Technical indicators are neutral overall, providing limited confirmation of sustained momentum.
Positive Factors
Strong revenue and unit growth
Shake Shack has delivered durable top-line expansion and rapid unit growth, with system-wide sales and mid-teens revenue growth in 2025 plus a large development pipeline. This scale expansion supports revenue diversification across markets and drives long-term franchise and company-operated cash flows.
Restaurant-level margin expansion
Sustained restaurant-level margin improvement reflects operational levers—supply-chain savings, labor model changes, and kitchen/equipment upgrades—that improve unit economics. These structural gains can persist across new openings and support scalable profitability as the chain grows.
Lower build costs and development discipline
A material reduction in build costs lowers capital intensity and shortens payback periods for new restaurants, enabling faster, more profitable expansion. Combined with development discipline and a large pipeline, this supports sustainable unit economics and long-term return on invested capital.
Negative Factors
Elevated leverage
A debt-heavy capital structure increases financial risk and reduces flexibility. High leverage can amplify earnings volatility, constrain investment choices, and raise interest burden during slower comps or rising rates, making capital allocation and deleveraging key multi-month priorities.
Modest and variable free cash flow
Free cash flow remains small relative to expansion needs and has declined year-over-year, with prior periods of negative FCF. Inconsistent cash generation can limit the company's ability to fund rapid unit growth, pay down debt, or absorb shocks without raising external capital.
High commodity exposure (beef) pressuring margins
Material exposure to beef cost swings (≈30% of basket) creates persistent margin vulnerability. Even with supply-chain initiatives, sustained or renewed beef inflation can erode restaurant-level margins and force pricing or promotional trade-offs that weaken mix and long-term profitability.
Shake Shack (SHAK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.03B
Dividend YieldN/A
Average Volume (3M)1.45M
Price to Earnings (P/E)86.4
Beta (1Y)1.31
Revenue Growth13.49%
EPS Growth402.23%
CountryUS
Employees12,826
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)0.37
Shares Outstanding40,253,590
10 Day Avg. Volume1,613,252
30 Day Avg. Volume1,446,392
Financial Highlights & Ratios
PEG Ratio0.21
Price to Book (P/B)6.21
Price to Sales (P/S)2.26
P/FCF Ratio57.76
Enterprise Value/Market Cap1.07
Enterprise Value/Revenue2.99
Enterprise Value/Gross Profit16.65
Enterprise Value/Ebitda23.43
Forecast
1Y Price Target
$108.76Price Target Upside15.16% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering19
EPS Forecast (FY)1.36
Revenue Forecast (FY)$1.65B
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 beverages at its company-operated restaurants and franchised locations. The company's revenue model is built on a combination of dine-in, takeout, and delivery services. Key revenue streams include direct sales from the restaurants, as well as royalties and franchise fees from its franchised locations. Additionally, Shake Shack has partnerships with delivery services and operates a robust digital ordering platform, which enhances convenience and drives sales. The company also benefits from seasonal promotions and limited-time offerings, which attract customers and boost volume during specific periods.
Shake Shack Key Performance Indicators (KPIs)
Any
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.
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.
Data provided by:
The Fly
The FlyShake Shack Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call communicated solid operational progress and financial momentum (mid-teens revenue growth, ~20% adjusted EBITDA growth, margin expansion, significant unit growth, cost reductions, and digital traction) while acknowledging near-term headwinds from beef inflation, weather-related volatility, and higher near-term G&A/marketing spending. Management presented clear mitigation plans (supply chain diversification, labor optimization, kitchen/equipment improvements, targeted marketing, and development discipline) and reiterated multi-year margin and growth targets, resulting in more positive than negative detail overall.Q4-2025 Updates
Positive Updates
Revenue Growth and Scale
Total revenue of approximately $1.45 billion for fiscal 2025, representing roughly mid-teens year-over-year growth; fourth quarter revenue of $400.5 million, up 21.9% year-over-year.
Adjusted EBITDA Expansion
Adjusted EBITDA reached approximately $210 million for the year, growing about 19.5%–20% year-over-year, adding nearly $80 million to adjusted EBITDA over the last two years.
Same-Shack Sales and Traffic Momentum
Company-operated same-Shack sales growth of 2.3% for the year; fourth quarter same-Shack sales +2.1% (0.5% traffic, 1.6% price/mix). January 2026 same-Shack sales increased 4.3% year-over-year despite weather headwinds.
Margin Improvement at Restaurant Level
Expanded restaurant-level profit margin by 120 basis points to 22.6% in 2025, reflecting operational improvements and supply chain initiatives.
Strong Development and Unit Growth
Opened 85 Shacks system-wide in 2025 (45 company-operated, 40 licensed); announced plans for 55–60 new company-operated Shacks in 2026; ~34 Shacks under construction at year-end.
Material Reduction in Build Costs
Reduced average net build cost for new Shacks to under $2.0 million in 2025, a reduction of approximately 20% versus the prior year through design simplification and procurement strategies.
Operational Excellence and Labor Optimization
Implemented new labor model and performance scorecard: attainment to labor guide improved from ~50% of Shacks meeting targets mid-2024 to consistently above 90% in 2025; labor as a percent of Shack sales improved ~150 basis points year-over-year in Q4.
Improved Guest Experience Metrics
Average wait times improved from seven minutes in 2023 to under six minutes in 2025; team member tenure increased nearly 40% since 2023; Fries-related guest complaints dropped from >30% to <10% after equipment rollouts.
Digital and Marketing Traction
1-3-5 in-app promotion drove app downloads up approximately 50% since launch and has been a material driver of incremental traffic and app engagement; loyalty platform planned for launch later in 2026.
Balance Sheet and Cash Generation
Ended the year with $360.1 million in cash and cash equivalents and generated $56.5 million in free cash flow; adjusted pro forma net income of $16.6 million ($0.37 per diluted share) and GAAP net income of $11.8 million ($0.28 per diluted share).
Negative Updates
Elevated Commodity Inflation — Beef Pressure
Significant commodity headwinds in 2025 with beef inflation reaching the mid-teens in the second half of the year; beef represents ~30% of the blended food & paper basket and remains a key uncertainty for 2026.
Food & Paper Cost Intensity
Fourth quarter food and paper costs were $110.6 million, or 28.7% of Shack sales; blended food and paper inflation up low-single digits in Q4 with beef up low-teens.
Weather-Related Sales Volatility
Inclement weather in core Northeast markets negatively impacted the final six weeks of the fourth quarter; management estimated an approximate 400 basis point headwind to January comps from weather in some markets.
Average Weekly Sales and Timing Effects
January average weekly sales (AWS) of $68,000 were down 7% year-over-year, primarily due to the 53rd week in 2025 which shifted holiday sales timing and introduced an approximate 250 basis point headwind to Q1 revenue comparability.
Increased G&A and Planned Marketing Spend
Full-year G&A of $176.2 million (~12.2% of total revenue) reflects incremental investments in marketing and people; 2026 marketing expected to run 2%–3% of revenue (above historical ~2%), resulting in a near-term step-up in G&A.
Other Operating Expense Pressure
Other operating expenses rose by ~70 basis points year-over-year in Q4 (15.5% of Shack sales) driven by a higher delivery sales mix and increased repairs & maintenance as company invests in assets.
Mix Impact from Promotional/LTO Activity
Certain promotions and LTOs (e.g., Big Shack pricing) caused negative mix effects in P12 and select periods, partially offset by incremental traffic; management noted intentional trade-offs between volume and check mix.
Average Build Cost Noise from Format Mix
While average net build cost declined ~20%, management noted future average build-cost improvements may be muted as the development mix shifts toward drive-thrus, which have higher build costs.
Company Guidance
Shake Shack’s guidance for 2026 calls for Q1 total revenue of $366.0–370.0 million, same‑Shack sales up 3%–5%, licensing revenue of $12.8–13.2 million, restaurant‑level profit margin of 21.5%–22%, and roughly four licensed openings (with an exit‑quarter overall price of ~3.5% after rolling off a ~1% delivery price); management also flagged an approximate 250‑bp holiday‑timing headwind to Q1 revenue (and noted a ~400‑bp weather impact in January). For the full year they reiterate low‑teens total revenue growth, low‑teens system‑wide unit growth, at least 50 bps of restaurant‑level margin expansion, and adjusted EBITDA growth in the low‑ to high‑teens; planned marketing spend is 2%–3% of revenue, food & paper inflation is expected to be low single digits after supply‑chain savings (mid‑ to high‑single digits excluding savings) with beef up mid‑teens (beef ≈30% of the blended food & paper basket), labor inflation in the low single digits, and G&A expected to be relatively steady quarterly with longer‑term leverage such that G&A growth should be lower than sales by 2027.Shake Shack Financial Statement Overview
Summary
Strong multi-year revenue growth and improved profitability (2025 net income ~$45.7M; EBITDA margin ~12%) are offset by a debt-heavy balance sheet (2025 debt-to-equity ~1.69) and only modest/variable free cash flow (~$56.5M in 2025, down YoY).Income Statement
Revenue has compounded strongly since 2020, with continued growth through 2025 (annual report revenue up to ~$1.45B). Profitability has also improved meaningfully versus the 2020–2022 loss period, with 2025 annual report net income of ~$45.7M and a ~3.2% net margin, and EBITDA margin near ~12%. The main weakness is margin quality/consistency: profitability remains relatively thin for the industry and 2025 margin fields appear inconsistent (e.g., gross margin/EBIT margin shown as 0%), which reduces confidence in the reported margin profile.68
Positive
Balance Sheet
The company is operating with elevated leverage: total debt is ~$886M against ~$525M of equity in 2025, translating to debt-to-equity of ~1.69 (and similarly high across prior years). Equity has grown, and returns improved with the 2025 annual report return on equity around ~8.7%, but the capital structure remains debt-heavy, which can amplify risk if same-store trends or consumer demand soften.52
Neutral
Cash Flow
Operating cash flow has strengthened over time, reaching ~$222M in 2025, supporting the business as it scales. However, free cash flow is positive but modest (~$56.5M in 2025) and declined year over year (free cash flow growth about -10%), and prior years show periods of negative free cash flow (notably 2020–2023). Cash generation looks improved but not yet consistently robust relative to earnings and growth ambitions.61
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.45B | 1.25B | 1.09B | 900.49M | 739.89M |
| Gross Profit | 259.80M | 573.92M | 478.24M | 381.54M | 306.52M |
| EBITDA | 181.37M | 120.89M | 111.74M | 51.53M | 44.48M |
| Net Income | 45.73M | 10.21M | 20.26M | -21.23M | -4.56M |
Balance Sheet | |||||
| Total Assets | 1.90B | 1.70B | 1.61B | 1.51B | 1.46B |
| Cash, Cash Equivalents and Short-Term Investments | 360.12M | 320.71M | 293.21M | 311.23M | 382.41M |
| Total Debt | 886.42M | 865.36M | 771.33M | 720.51M | 686.19M |
| Total Liabilities | 1.34B | 1.20B | 1.14B | 1.08B | 1.03B |
| Stockholders Equity | 525.33M | 470.02M | 443.42M | 412.20M | 409.54M |
Cash Flow | |||||
| Free Cash Flow | 56.51M | 35.66M | -14.03M | -65.82M | -43.09M |
| Operating Cash Flow | 222.35M | 171.16M | 132.14M | 76.74M | 58.40M |
| Investing Cash Flow | -165.85M | -66.08M | -132.32M | -143.42M | -144.89M |
| Financing Cash Flow | -17.10M | -9.02M | -5.68M | -5.20M | 242.02M |
Shake Shack Technical Analysis
Positive
94.44
Price Trends
91.06
Positive
89.82
Positive
103.82
Negative
Market Momentum
0.78
Negative
52.71
Neutral
45.24
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 94.44 is above the 20-day moving average (MA) of 93.59, above the 50-day MA of 91.06, and below the 200-day MA of 103.82, indicating a neutral trend. The MACD of 0.78 indicates Negative momentum. The RSI at 52.71 is Neutral, neither overbought nor oversold. The STOCH value of 45.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $411.82M | 19.31 | ― | 2.09% | 7.81% | 4.58% | |
64 Neutral | $9.13B | 145.70 | 8.64% | ― | 23.93% | 153.50% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $4.03B | 86.42 | 9.19% | ― | 13.49% | 402.23% | |
57 Neutral | $1.42B | 9.00 | 87.63% | 8.15% | -0.21% | 0.16% | |
45 Neutral | $293.54M | -4.19 | ― | 9.34% | -6.75% | -118.94% |
* Consumer Cyclical Sector Average
SHAK
Shake Shack
94.44
-8.34
-8.11%
JACK
Jack In The Box
15.42
-19.90
-56.34%
NATH
Nathan's Famous
100.58
4.16
4.31%
WEN
Wendy's
7.44
-6.61
-47.04%
CAVA
CAVA Group, Inc.
78.49
-9.16
-10.45%
Shake Shack Corporate Events
Business Operations and StrategyFinancial Disclosures
Shake Shack Delivers Strong Q4 and Fiscal 2025 Results
Positive
Feb 26, 2026
On February 26, 2026, Shake Shack reported its financial results for the fourth quarter and full year ended December 31, 2025, highlighting strong top-line growth and expanding profitability. Fourth-quarter total revenue rose 21.9% year-on-year to $400.5 million, driven by $385.3 million in Shack sales, $15.2 million in licensing revenue, 2.1% same-Shack sales growth and the opening of 15 company-operated and 17 licensed Shacks.
For fiscal 2025, total revenue increased 15.4% versus 2024 to $1.45 billion, with system-wide sales up 15.9% to $2.23 billion and same-Shack sales up 2.3%, underscoring steady demand across the portfolio. The company delivered operating income of $62.5 million, net income of $49.7 million and restaurant-level profit margins of roughly 22.6%, while expanding its footprint by 45 new company-operated and 40 new licensed locations, reinforcing its growth trajectory and strengthening its position within the fast-casual dining market.
The most recent analyst rating on (SHAK) stock is a Buy with a $110.00 price target. To see the full list of analyst forecasts on Shake Shack stock, see the SHAK Stock Forecast page.
Executive/Board Changes
Shake Shack Appoints Interim Finance Chief Amid CFO Transition
Neutral
Feb 24, 2026
On February 23, 2026, Shake Shack’s board designated current Senior Vice President and Corporate Controller Peter Herpich as the company’s interim principal financial officer, following the previously disclosed November 2025 resignation of Chief Financial Officer Katherine Fogertey, who will remain as a senior advisor until March 4, 2026. The move places an experienced accountant with prior finance leadership roles at Casper Inc. and Barnes & Noble Inc. at the helm of Shake Shack’s finance function while the company searches for a permanent CFO, providing continuity in financial oversight without any related-party or conflict-of-interest concerns disclosed in connection with his appointment.
Herpich, a 55-year-old Certified Public Accountant who joined Shake Shack in May 2023, has a long track record in corporate controllership and accounting oversight at consumer-facing companies, including 25 years at Barnes & Noble Inc. The interim designation underscores Shake Shack’s effort to maintain stable financial stewardship during an executive transition that could be closely watched by investors and other stakeholders, given the importance of the CFO role in guiding the company’s financial strategy and reporting integrity.
The most recent analyst rating on (SHAK) stock is a Buy with a $144.00 price target. To see the full list of analyst forecasts on Shake Shack stock, see the SHAK Stock Forecast page.
Business Operations and StrategyFinancial Disclosures
Shake Shack Announces Strong 2025 Results and 2026 Outlook
Positive
Jan 12, 2026
On January 12, 2026, Shake Shack reported preliminary unaudited results for the fourth quarter and full year ended December 31, 2025, alongside an updated 2025 outlook and initial guidance for 2026. For 2025, the company generated about $400.5 million in fourth-quarter revenue and $1.45 billion for the year, with same-Shack sales up 2.1% in the quarter and 2.3% for the year versus 2024, and it opened 45 new company-operated and 40 licensed Shacks, underscoring rapid unit expansion despite weather-related softness late in the quarter and inflationary pressures, particularly on beef. Management indicated restaurant-level profit margins for 2025 of roughly 22.5%–22.7% of Shack sales and projected 2026 revenue of $1.6 billion to $1.7 billion with modest positive same-store growth, higher margins, continued aggressive development of 55–60 new company-operated and 40–45 licensed Shacks, and reiterated its long-term target of more than 1,500 company-operated locations, signaling confidence in sustained unit-led growth and improving profitability for investors and other stakeholders.
The most recent analyst rating on (SHAK) stock is a Buy with a $146.00 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.