Shake Shack (SHAK) AI Stock Analysis

• Market Cap: $3.52B
• Dividend Yield: N/A
• Average Volume (3M): 1.51M
• Price to Earnings (P/E): 351.5
• Beta (1Y): 1.09
• Revenue Growth: 15.18%
• EPS Growth: -48.78%
• Country: US
• Employees: 12,826
• Sector: Consumer Cyclical
• Sector Strength: 63
• Industry: Restaurants
• EPS (TTM): 0.26
• Shares Outstanding: 40,082,070
• 10 Day Avg. Volume: 1,804,902
• 30 Day Avg. Volume: 1,510,766
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.08
• Price to Cash Flow (P/CF): 21.40
• P/FCF Ratio: 21.20
• Enterprise Value/Market Cap: 1.72
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 10.53
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $110.38
• Price Target Upside: 24.43% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

Shake Shack's overall stock score reflects robust financial performance and positive earnings call sentiment, which are the main driving factors. However, the technical analysis indicates caution, and the valuation highlights potential overvaluation risks. Despite these concerns, strong strategic initiatives and growth prospects provide a balanced outlook.

Positive Factors

Margin Improvement

Shake Shack achieved its 11th straight quarter of year-over-year restaurant-level margin expansion on improved labor productivity on its new labor model.

Operational Efficiency

Shake Shack has consistently hit or exceeded the high-end of its restaurant-level margin guidance for ten consecutive quarters, reflecting strong operational execution.

Product Innovation

The Dubai Chocolate Pistachio Shake was introduced as a LTO and achieved some of the best new guest acquisition metrics for any new product or LTO in Shake Shack’s history.

Negative Factors

Sales Outlook

Lowered same store sales guidance and estimates reflect a more challenging sales outlook for 2025.

Tourism Impact

There is a continued headwind from lower tourism and sentiment in key markets like New York and California, affecting Shake Shack's performance.

Weather Impact

Comps were pressured by more than 400 basis points of weather, broader consumer pressure, and an extended LTO, with traffic down 4.6%.

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 operation of company-owned restaurants and, to a lesser extent, through licensed locations across the globe. The majority of Shake Shack's income is derived from the sales of its food and beverages in company-operated stores. In addition, the company earns licensing fees and royalties from licensed Shack locations, which expand its brand presence internationally and in certain domestic markets without the direct capital investment required for company-owned locations. Critical to its revenue model are strategic locations in high-traffic urban areas, innovative menu offerings that attract repeat customers, and a strong brand that leverages social media and word-of-mouth marketing. Partnerships with delivery services also contribute to revenue by allowing Shake Shack to reach a wider audience beyond its physical locations.

Shake Shack Financial Statement Overview

Summary

Shake Shack demonstrates strong growth and operational efficiency, particularly in revenue and cash flow management. While profitability margins are currently tight, the company's financial stability is supported by a balanced approach to leverage and equity. The significant improvement in free cash flow is a positive indicator of future liquidity and investment potential.

Income Statement

Shake Shack has shown a strong revenue growth rate of 15.2% from 2023 to 2024, indicating a robust upward trajectory. The gross profit margin remains high at 100%, suggesting efficient cost management. However, the net profit margin is relatively low at 0.8% for 2024, reflecting tight profitability. The EBIT and EBITDA margins are 0.2% and 9.1%, respectively, showing moderate operating efficiency.

Balance Sheet

The company's debt-to-equity ratio of 1.70 indicates a moderate level of leverage, which is common in the industry. The return on equity is 2.2%, pointing to modest profitability for shareholders. The equity ratio of 27.7% suggests a reasonable level of financial stability, balancing assets with equity financing.

Cash Flow

Shake Shack's free cash flow has improved significantly, with a growth rate of 354% from 2023 to 2024, enhancing liquidity. The operating cash flow to net income ratio is strong at 16.8, showing efficient cash conversion from earnings. The free cash flow to net income ratio stands at 3.5, indicating a healthy cash generation capability.

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
	EBIT
3.04M	5.92M	-20.34M	-14.13M	-34.51M
	EBITDA
120.89M	111.74M	51.53M	44.48M	5.58M
	Net Income Common Stockholders
10.21M	20.26M	-25.97M	-10.11M	-45.53M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
320.71M	293.21M	311.23M	302.41M	183.76M
	Total Assets
1.70B	1.61B	1.49B	1.46B	1.15B
	Total Debt
796.92M	771.33M	714.05M	686.19M	384.98M
	Net Debt
476.21M	546.68M	483.53M	383.78M	238.10M
	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: 88.71
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 88.71 is above the 20-day moving average (MA) of 84.50, below the 50-day MA of 91.62, and below the 200-day MA of 107.69, indicating a neutral trend. The MACD of -0.59 indicates Negative momentum. The RSI at 51.15 is Neutral, neither overbought nor oversold. The STOCH value of 62.86 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
PTLO	74 Outperform	$775.50M	22.70	8.16%	―	4.51%	43.99%
CAKE	73 Outperform	$2.28B	14.39	41.18%	2.14%	4.13%	56.76%
SHAK	70 Outperform	$3.52B	351.51	2.23%	―	15.18%	-48.78%
FWRG	67 Neutral	$1.08B	58.23	3.27%	―	13.95%	-26.46%
Sector *	61 Neutral	$6.55B	11.72	3.07%	4.01%	2.66%	-21.27%
WEN	60 Neutral	$2.51B	13.53	68.30%	8.00%	2.98%	-2.58%
SG	46 Neutral	$2.32B	―	-19.46%	―	15.89%	22.07%

Shake Shack Corporate Events

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.

Spark’s Take on SHAK Stock

According to Spark, TipRanks’ AI Analyst, SHAK is a Neutral.

Shake Shack’s overall score reflects a strong financial performance, particularly in revenue growth and cash flow management, supported by strategic initiatives. However, technical indicators suggest a potential decline, and the high P/E ratio indicates overvaluation risks. The earnings call provided confidence in future growth, balancing some of these concerns.

To see Spark’s full report on SHAK stock, click here.

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.

Spark’s Take on SHAK Stock

According to Spark, TipRanks’ AI Analyst, SHAK is a Neutral.

Shake Shack’s overall score reflects a strong financial performance, particularly in revenue growth and cash flow management, supported by strategic initiatives. However, technical indicators suggest a potential decline, and the high P/E ratio indicates overvaluation risks. The earnings call provided confidence in future growth, balancing some of these concerns.

To see Spark’s full report on SHAK stock, click here.

Shake Shack Reports Strong Fiscal Year 2024 Results

On February 20, 2025, Shake Shack announced its financial results for the fourth quarter and fiscal year ending December 25, 2024. The company reported a 15.2% increase in total revenue for the fiscal year 2024, reaching $1,252.6 million, with significant growth in Shack sales and licensing revenue. The results highlight Shake Shack’s continued expansion, with 43 new company-operated locations and 33 new licensed locations opened in 2024, reflecting its strategic growth and strong market demand.