Shake Shack (SHAK) AI Stock Analysis

• Market Cap: $5.01B
• Dividend Yield: N/A
• Average Volume (3M): 1.68M
• Price to Earnings (P/E): 408.5
• Beta (1Y): 1.23
• Revenue Growth: 14.07%
• EPS Growth: -47.47%
• Country: US
• Employees: 12,826
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Restaurants
• EPS (TTM): 0.14
• Shares Outstanding: 40,221,660
• 10 Day Avg. Volume: 1,602,573
• 30 Day Avg. Volume: 1,677,910
• PEG Ratio: 14.12
• Price to Book (P/B): 8.89
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 105.66
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 0.96
• Enterprise Value/Gross Profit: 11.70
• Enterprise Value/Ebitda: 9.76
• 1Y Price Target: $110.56
• Price Target Upside: -5.69% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

Shake Shack demonstrates robust financial performance with growth in revenue and cash flow, supported by strategic initiatives. However, technical analysis presents some caution due to potential resistance levels, and the high P/E ratio suggests overvaluation risks. Despite these concerns, the positive outlook from the earnings call indicates potential for future growth.

Positive Factors

Market Positioning

Shake Shack is well positioned in the current environment with a strong value proposition for consumers and significant sales, margin, and development drivers.

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.

Sales Improvement

The launch of a new Summer BBQ menu line-up earlier than last year is expected to benefit upcoming sales.

Negative Factors

Consumer Spending

The philosophy of prioritizing reinvestment into marketing campaigns to drive traffic over menu pricing is not prudent, especially when middle income spending has shown evidence of pull back.

Market Challenges

Shake Shack has high exposure to urban markets, which are notably more challenged so far in 2025.

Valuation Concerns

SHAK now trades in excess of the 3Y avg FY2 EV/EBITDA, leading to the belief that the challenged restaurant spending backdrop limits further multiple expansion, particularly in the crowded burger category where the concept lacks category leadership.

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 exhibits strong financial performance with consistent revenue growth and effective cash flow management. The company has demonstrated operational efficiency but faces pressure on net profit margins and leverage, which could be improved.

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
	EBIT
10.90M	3.04M	5.92M	-20.34M	-14.13M	-34.51M
	EBITDA
125.18M	120.89M	111.74M	51.53M	44.48M	5.58M
	Net Income Common Stockholders
12.41M	10.21M	20.26M	-25.97M	-10.11M	-45.53M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
284.77M	320.71M	293.21M	311.23M	302.41M	183.76M
	Total Assets
1.62B	1.70B	1.61B	1.49B	1.46B	1.15B
	Total Debt
785.43M	809.62M	771.33M	714.05M	686.19M	384.98M
	Net Debt
525.23M	488.91M	546.68M	483.53M	383.78M	238.10M
	Total Liabilities
1.15B	1.20B	1.14B	1.08B	1.02B	710.86M
	Stockholders Equity
446.39M	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: 117.23
• 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 117.23 is above the 20-day moving average (MA) of 101.84, above the 50-day MA of 92.67, and above the 200-day MA of 109.22, indicating a bullish trend. The MACD of 7.79 indicates Negative momentum. The RSI at 75.47 is Negative, neither overbought nor oversold. The STOCH value of 92.65 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
PTLO	77 Outperform	$968.11M	29.94	7.37%	―	4.57%	6.89%
CAKE	73 Outperform	$2.70B	17.60	46.60%	1.98%	4.42%	48.23%
SHAK	68 Neutral	$5.01B	408.49	2.70%	―	14.07%	-47.47%
WEN	66 Neutral	$2.35B	13.08	90.40%	8.10%	2.18%	-5.15%
Sector *	61 Neutral	$6.97B	11.38	2.88%	3.90%	2.64%	-22.07%
FWRG	61 Neutral	$1.02B	95.92	1.86%	―	14.43%	-53.71%
SG	59 Neutral	$1.68B	―	-19.79%	―	11.10%	18.05%

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.