DB:9SH

Stock Analysis Report

Executive Summary

Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally.

Rewards

Earnings are forecast to grow 12.65% per year

Earnings grew by 470.6% over the past year

Risk Analysis

Shareholders have been diluted in the past year



Snowflake Analysis

Excellent balance sheet with solid track record.

Share Price & News

How has Shake Shack's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 9SH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.0%

9SH

5.4%

DE Hospitality

1.7%

DE Market


1 Year Return

45.6%

9SH

11.0%

DE Hospitality

15.0%

DE Market

Return vs Industry: 9SH exceeded the German Hospitality industry which returned 11% over the past year.

Return vs Market: 9SH exceeded the German Market which returned 15% over the past year.


Shareholder returns

9SHIndustryMarket
7 Day2.0%5.4%1.7%
30 Day11.3%3.4%1.4%
90 Day17.1%-9.6%3.3%
1 Year45.6%45.6%15.8%11.0%18.5%15.0%
3 Year97.6%97.6%-4.5%-17.6%17.1%6.9%
5 Year70.5%70.5%-7.0%-26.6%24.3%7.3%

Price Volatility Vs. Market

How volatile is Shake Shack's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Shake Shack undervalued compared to its fair value and its price relative to the market?

105.8x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 9SH (€67.8) is trading above our estimate of fair value (€14.57)

Significantly Below Fair Value: 9SH is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 9SH is poor value based on its PE Ratio (105.8x) compared to the Hospitality industry average (23.8x).

PE vs Market: 9SH is poor value based on its PE Ratio (105.8x) compared to the German market (21.1x).


Price to Earnings Growth Ratio

PEG Ratio: 9SH is poor value based on its PEG Ratio (8.4x)


Price to Book Ratio

PB vs Industry: 9SH is overvalued based on its PB Ratio (8.5x) compared to the DE Hospitality industry average (2.3x).


Next Steps

Future Growth

How is Shake Shack forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

12.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 9SH's forecast earnings growth (12.7% per year) is above the savings rate (-0.4%).

Earnings vs Market: 9SH's earnings (12.7% per year) are forecast to grow slower than the German market (13.2% per year).

High Growth Earnings: 9SH's earnings are forecast to grow, but not significantly.

Revenue vs Market: 9SH's revenue (16.1% per year) is forecast to grow faster than the German market (5% per year).

High Growth Revenue: 9SH's revenue (16.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 9SH's Return on Equity is forecast to be low in 3 years time (6.6%).


Next Steps

Past Performance

How has Shake Shack performed over the past 5 years?

43.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 9SH has high quality earnings.

Growing Profit Margin: 9SH's current net profit margins (3.7%) are higher than last year (0.9%).


Past Earnings Growth Analysis

Earnings Trend: 9SH's earnings have grown significantly by 43.4% per year over the past 5 years.

Accelerating Growth: 9SH's earnings growth over the past year (470.6%) exceeds its 5-year average (43.4% per year).

Earnings vs Industry: 9SH earnings growth over the past year (470.6%) exceeded the Hospitality industry -36.8%.


Return on Equity

High ROE: 9SH's Return on Equity (8.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Shake Shack's financial position?


Financial Position Analysis

Short Term Liabilities: 9SH's short term assets ($99.4M) exceed its short term liabilities ($96.0M).

Long Term Liabilities: 9SH's short term assets ($99.4M) do not cover its long term liabilities ($549.0M).


Debt to Equity History and Analysis

Debt Level: 9SH is debt free.

Reducing Debt: 9SH has no debt compared to 5 years ago when its debt to equity ratio was 0.9%.

Debt Coverage: 9SH has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 9SH has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 9SH has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if 9SH's debt is covered by short term assets.


Next Steps

Dividend

What is Shake Shack's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.3%markettop25%3.6%industryaverage5.1%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate 9SH's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 9SH's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 9SH's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 9SH's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 9SH's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.0yrs

Average management tenure


CEO

Randy Garutti (44yo)

7.8yrs

Tenure

US$3,805,411

Compensation

Mr. Randall J. Garutti, also known as Randy, has been Chief Executive Officer of Shake Shack Inc. since April 2012. Mr. Garutti has been the Chief Executive Officer and Director of SSE Holdings since April ...


CEO Compensation Analysis

Compensation vs Market: Randy's total compensation ($USD3.81M) is above average for companies of similar size in the German market ($USD2.02M).

Compensation vs Earnings: Randy's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Daniel Meyer
Founder & Chairman10.1yrsUS$50.00k7.94% $201.4m
Randall Garutti
CEO & Director7.8yrsUS$3.81m0.052% $1.3m
Tara Comonte
President & CFO0.3yrsUS$1.58m0.054% $1.4m
Zachary Koff
Chief Operating Officer3.1yrsUS$525.73k0.015% $385.7k
Dave Harris
Chief Information Officer1yrsno datano data
Ronald Palmese
Senior VP0yrsUS$1.25mno data
Edwin Bragg
Vice President of Marketing & Communications3yrsno datano data
Jay Livingston
Chief Marketing Officer1.1yrsno datano data
Diane Neville
Senior Vice President of People Resources0.7yrsno datano data
Michael Kark
Chief Global Licensing Officer1yrsno datano data

1.0yrs

Average Tenure

44yo

Average Age

Experienced Management: 9SH's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Daniel Meyer
Founder & Chairman10.1yrsUS$50.00k7.94% $201.4m
Randall Garutti
CEO & Director7.8yrsUS$3.81m0.052% $1.3m
Jonathan Sokoloff
Independent Director7.2yrsUS$50.00k0.0031% $77.6k
Robert Vivian
Independent Director9.7yrsUS$95.00k0.028% $710.8k
Joshua Silverman
Independent Director3.3yrsUS$75.00k0.0029% $72.3k
Jeffrey Flug
Independent Director10.1yrsUS$85.00k0.013% $333.2k
Jenna Lyons
Independent Director5.2yrsUS$75.00k0.0046% $116.4k
Anna Fieler
Independent Director2.2yrsUS$75.00k0.0012% $30.4k
Sumaiya Balbale
Independent Director0.9yrsno datano data

7.2yrs

Average Tenure

51yo

Average Age

Experienced Board: 9SH's board of directors are considered experienced (7.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 10%.


Top Shareholders

Company Information

Shake Shack Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Shake Shack Inc.
  • Ticker: 9SH
  • Exchange: DB
  • Founded: 2004
  • Industry: Restaurants
  • Sector: Consumer Services
  • Implied Market Cap: US$2.750b
  • Market Cap: US$2.281b
  • Listing Market Cap: US$2.536b
  • Shares outstanding: 37.52m
  • Website: https://www.shakeshack.com

Number of Employees


Location

  • Shake Shack Inc.
  • 225 Varick Street
  • Suite 301
  • New York
  • New York
  • 10014
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SHAKNYSE (New York Stock Exchange)YesClass A Common StockUSUSDJan 2015
9SHDB (Deutsche Boerse AG)YesClass A Common StockDEEURJan 2015
0L5RLSE (London Stock Exchange)YesClass A Common StockGBUSDJan 2015
SHAK *BMV (Bolsa Mexicana de Valores)YesClass A Common StockMXMXNJan 2015

Biography

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 26, 2018, it operated 208 Shacks, including 124 domestic company-operated Shacks, 12 domestic licensed Shacks, and 72 international licensed Shacks. Shake Shack Inc. was founded in 2004 and is headquartered in New York, New York. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/15 23:11
End of Day Share Price2020/02/14 00:00
Earnings2019/09/25
Annual Earnings2018/12/26


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.