NYSE:SHAK

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 10.34% per year

Earnings grew by 470.6% over the past year

Risk Analysis

Highly volatile share price over past 3 months

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: SHAK's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

15.9%

SHAK

3.1%

US Hospitality

1.7%

US Market


1 Year Return

41.5%

SHAK

19.2%

US Hospitality

23.6%

US Market

Return vs Industry: SHAK exceeded the US Hospitality industry which returned 20.1% over the past year.

Return vs Market: SHAK exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

SHAKIndustryMarket
7 Day15.9%3.1%1.7%
30 Day13.7%4.6%3.5%
90 Day-21.0%15.8%11.7%
1 Year41.5%41.5%22.3%19.2%26.2%23.6%
3 Year102.7%102.7%47.0%37.1%53.2%43.3%
5 Yearn/a56.1%39.6%75.5%56.1%

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

Valuation

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

100.93x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SHAK ($64.1) is trading above our estimate of fair value ($14.05)

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


Price To Earnings Ratio

PE vs Industry: SHAK is poor value based on its PE Ratio (92.5x) compared to the Hospitality industry average (25.1x).

PE vs Market: SHAK is poor value based on its PE Ratio (92.5x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: SHAK is overvalued based on its PB Ratio (7.4x) compared to the US Hospitality industry average (2.4x).


Next Steps

Future Growth

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

10.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SHAK's forecast earnings growth (10.3% per year) is above the savings rate (1.7%).

Earnings vs Market: SHAK's earnings (10.3% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: SHAK's revenue (15.7% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: SHAK's revenue (15.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SHAK'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: SHAK has high quality earnings.

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


Past Earnings Growth Analysis

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

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

Earnings vs Industry: SHAK earnings growth over the past year (470.6%) exceeded the Hospitality industry -18.9%.


Return on Equity

High ROE: SHAK'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: SHAK's short term assets ($99.4M) exceed its short term liabilities ($96.0M).

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


Debt to Equity History and Analysis

Debt Level: SHAK is debt free.

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

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

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


Balance Sheet

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

Debt Coverage by Assets: Insufficient data to determine if SHAK'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%1.4%markettop25%3.7%industryaverage2.8%forecastin3Years0%

Current dividend yield vs market & industry

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

High Dividend: Unable to evaluate SHAK'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 SHAK's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SHAK'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 SHAK's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Shake Shack's salary, the management and board of directors tenure and is there insider trading?

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 ($USD3.81M) is about average for companies of similar size in the US market ($USD3.86M).

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


Management Age and Tenure

1.0yrs

Average Tenure

44yo

Average Age

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


Board Age and Tenure

7.1yrs

Average Tenure

51yo

Average Age

Experienced Board: SHAK's board of directors are considered experienced (7.1 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$814,03914 Aug 19
Jeffrey Flug
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares9,013
Max PriceUS$90.58
SellUS$3,642,43209 Aug 19
Jeffrey Flug
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares40,987
Max PriceUS$90.20
SellUS$635,91108 Aug 19
Tara Comonte
EntityIndividual
Role
President
President & CFO
Shares7,500
Max PriceUS$84.79
SellUS$228,61602 Aug 19
Daniel Meyer
EntityIndividual
Role
Chairman of the Board
Founder & Chairman
Shares2,987
Max PriceUS$76.54
SellUS$7,426,50419 Jul 19
Leonard Green & Partners, L.P.
EntityCompany
Shares100,793
Max PriceUS$73.95
SellUS$15,928,23817 Jul 19
Leonard Green & Partners, L.P.
EntityCompany
Shares212,927
Max PriceUS$75.93
SellUS$1,272,86904 Jun 19
Leonard Green & Partners, L.P.
EntityCompany
Shares21,144
Max PriceUS$60.20
SellUS$10,889,76717 May 19
Leonard Green & Partners, L.P.
EntityCompany
Shares178,739
Max PriceUS$61.30
SellUS$6,907,22516 May 19
Leonard Green & Partners, L.P.
EntityCompany
Shares114,169
Max PriceUS$60.50
SellUS$13,843,80113 May 19
Leonard Green & Partners, L.P.
EntityCompany
Shares229,962
Max PriceUS$60.30
SellUS$20,711,18614 Mar 19
Leonard Green & Partners, L.P.
EntityCompany
Shares389,921
Max PriceUS$53.23

Ownership Breakdown

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


Management Team

  • Danny Meyer (61yo)

    Founder & Chairman

    • Tenure: 10yrs
    • Compensation: US$50.00k
  • Tara Comonte (45yo)

    President & CFO

    • Tenure: 0.3yrs
    • Compensation: US$1.58m
  • Randy Garutti (44yo)

    CEO & Director

    • Tenure: 7.8yrs
    • Compensation: US$3.81m
  • Ron Palmese (40yo)

    Senior VP

    • Compensation: US$1.25m
  • Zach Koff (39yo)

    Chief Operating Officer

    • Tenure: 3yrs
    • Compensation: US$525.73k
  • Edwin Bragg

    Vice President of Marketing & Communications

    • Tenure: 2.9yrs
  • Michael Kark

    Chief Global Licensing Officer

    • Tenure: 0.9yrs
  • Jay Livingston

    Chief Marketing Officer

    • Tenure: 1yrs
  • Dave Harris

    Chief Information Officer

    • Tenure: 0.9yrs
  • Diane Neville

    Senior Vice President of People Resources

    • Tenure: 0.6yrs

Board Members

  • Jon Sokoloff (62yo)

    Independent Director

    • Tenure: 7.1yrs
    • Compensation: US$50.00k
  • Robert Vivian (61yo)

    Independent Director

    • Tenure: 9.6yrs
    • Compensation: US$95.00k
  • Josh Silverman (50yo)

    Independent Director

    • Tenure: 3.2yrs
    • Compensation: US$75.00k
  • Danny Meyer (61yo)

    Founder & Chairman

    • Tenure: 10yrs
    • Compensation: US$50.00k
  • Jeff Flug (57yo)

    Independent Director

    • Tenure: 10yrs
    • Compensation: US$85.00k
  • Jenna Lyons (51yo)

    Independent Director

    • Tenure: 5.1yrs
    • Compensation: US$75.00k
  • Anna Fieler (47yo)

    Independent Director

    • Tenure: 2.1yrs
    • Compensation: US$75.00k
  • Randy Garutti (44yo)

    CEO & Director

    • Tenure: 7.8yrs
    • Compensation: US$3.81m
  • Sumaiya Balbale (38yo)

    Independent Director

    • Tenure: 0.8yrs

Company Information

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


Key Information

  • Name: Shake Shack Inc.
  • Ticker: SHAK
  • Exchange: NYSE
  • Founded: 2004
  • Industry: Restaurants
  • Sector: Consumer Services
  • Implied Market Cap: US$2.623b
  • Market Cap: US$2.360b
  • 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 Analysis2020/01/20 00:44
End of Day Share Price2020/01/17 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.