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Shake Shack

NYSE:SHAK
Snowflake Description

Reasonable growth potential with adequate balance sheet.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
SHAK
NYSE
$2B
Imp Market Cap
  1. Home
  2. US
  3. Consumer Services
Company description

Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. The last earnings update was 51 days ago. More info.


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SHAK Share Price and Events
7 Day Returns
1%
NYSE:SHAK
-0.4%
US Hospitality
1.4%
US Market
1 Year Returns
-2.3%
NYSE:SHAK
-6.8%
US Hospitality
4.9%
US Market
SHAK Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Shake Shack (SHAK) 1% 12.9% 16.8% -2.3% 81.4% -
US Hospitality -0.4% 2.9% 1.9% -6.8% 50.6% 17.9%
US Market 1.4% 3.8% 3.5% 4.9% 44.8% 40.1%
1 Year Return vs Industry and Market
  • SHAK outperformed the Hospitality industry which returned -6.8% over the past year.
  • SHAK underperformed the Market in United States of America which returned 4.9% over the past year.
Price Volatility
SHAK
Industry
5yr Volatility vs Market

Value

 Is Shake Shack undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Shake Shack to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Shake Shack.

NYSE:SHAK Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 11 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 8.7%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NYSE:SHAK
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 6%
Hospitality Unlevered Beta Simply Wall St/ S&P Global 0.92
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.922 (1 + (1- 21%) (11.95%))
1.006
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.01
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (1.006 * 5.96%)
8.72%

Discounted Cash Flow Calculation for NYSE:SHAK using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Shake Shack is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

NYSE:SHAK DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 8.72%)
2019 -5.63 Analyst x2 -5.17
2020 -4.36 Analyst x3 -3.69
2021 -1.20 Analyst x1 -0.93
2022 13.30 Analyst x1 9.52
2023 22.52 Est @ 69.33% 14.82
2024 33.64 Est @ 49.35% 20.36
2025 45.53 Est @ 35.37% 25.35
2026 57.18 Est @ 25.57% 29.28
2027 67.88 Est @ 18.72% 31.97
2028 77.33 Est @ 13.92% 33.50
Present value of next 10 years cash flows $155.02
NYSE:SHAK DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= $77.33 × (1 + 2.73%) ÷ (8.72% – 2.73%)
$1,325.23
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $1,325.23 ÷ (1 + 8.72%)10
$574.13
NYSE:SHAK Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $155.02 + $574.13
$729.15
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $729.15 / 37.16
$19.62
NYSE:SHAK Discount to Share Price
Calculation Result
Value per share (USD) From above. $19.62
Current discount Discount to share price of $66.80
= -1 x ($66.80 - $19.62) / $19.62
-240.4%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of Shake Shack is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Shake Shack's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Shake Shack's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NYSE:SHAK PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-03-27) in USD $0.49
NYSE:SHAK Share Price ** NYSE (2019-06-25) in USD $66.8
United States of America Hospitality Industry PE Ratio Median Figure of 74 Publicly-Listed Hospitality Companies 22.64x
United States of America Market PE Ratio Median Figure of 3,095 Publicly-Listed Companies 17.73x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Shake Shack.

NYSE:SHAK PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NYSE:SHAK Share Price ÷ EPS (both in USD)

= 66.8 ÷ 0.49

135.93x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Shake Shack is overvalued based on earnings compared to the US Hospitality industry average.
  • Shake Shack is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does Shake Shack's expected growth come at a high price?
Raw Data
NYSE:SHAK PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 135.93x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 11 Analysts
30.7%per year
United States of America Hospitality Industry PEG Ratio Median Figure of 55 Publicly-Listed Hospitality Companies 1.91x
United States of America Market PEG Ratio Median Figure of 2,133 Publicly-Listed Companies 1.53x

*Line of best fit is calculated by linear regression .

NYSE:SHAK PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 135.93x ÷ 30.7%

4.42x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Shake Shack is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Shake Shack's assets?
Raw Data
NYSE:SHAK PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-03-27) in USD $7.96
NYSE:SHAK Share Price * NYSE (2019-06-25) in USD $66.8
United States of America Hospitality Industry PB Ratio Median Figure of 112 Publicly-Listed Hospitality Companies 2.19x
United States of America Market PB Ratio Median Figure of 5,255 Publicly-Listed Companies 1.79x
NYSE:SHAK PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NYSE:SHAK Share Price ÷ Book Value per Share (both in USD)

= 66.8 ÷ 7.96

8.39x

* Primary Listing of Shake Shack.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Shake Shack is overvalued based on assets compared to the US Hospitality industry average.
X
Value checks
We assess Shake Shack's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Hospitality industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Hospitality industry average (and greater than 0)? (1 check)
  5. Shake Shack has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Shake Shack expected to perform in the next 1 to 3 years based on estimates from 11 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
30.7%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Shake Shack expected to grow at an attractive rate?
  • Shake Shack's earnings growth is expected to exceed the low risk savings rate of 2.7%.
Growth vs Market Checks
  • Shake Shack's earnings growth is expected to exceed the United States of America market average.
  • Shake Shack's revenue growth is expected to exceed the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NYSE:SHAK Future Growth Rates Data Sources
Data Point Source Value (per year)
NYSE:SHAK Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 11 Analysts 30.7%
NYSE:SHAK Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 11 Analysts 19.6%
United States of America Hospitality Industry Earnings Growth Rate Market Cap Weighted Average 16.6%
United States of America Hospitality Industry Revenue Growth Rate Market Cap Weighted Average 7.3%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 13.9%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.4%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NYSE:SHAK Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 11 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NYSE:SHAK Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2022-12-31 1,060 133 1
2021-12-31 872 114 32 4
2020-12-31 732 115 25 11
2019-12-31 587 86 18 11
NYSE:SHAK Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-03-27 493 83 14
2018-12-26 459 85 15
2018-09-26 431 80 4
2018-06-27 406 78 4
2018-03-28 381 80 1
2017-12-27 359 71 0
2017-09-27 336 68 16
2017-06-28 316 64 15
2017-03-29 291 55 13
2016-12-28 268 54 12
2016-09-28 246 51 10
2016-06-29 225 48 8
2016-03-30 207 45 5

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Shake Shack's earnings are expected to grow significantly at over 20% yearly.
  • Shake Shack's revenue is expected to grow by 19.6% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NYSE:SHAK Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 11 Analyst Estimates (S&P Global) See Below

All data from Shake Shack Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:SHAK Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2022-12-31
2021-12-31 1.06 1.09 1.02 3.00
2020-12-31 0.79 0.92 0.63 6.00
2019-12-31 0.60 0.68 0.50 5.00
NYSE:SHAK Past Financials Data
Date (Data in USD Millions) EPS *
2019-03-27 0.49
2018-12-26 0.54
2018-09-26 0.13
2018-06-27 0.14
2018-03-28 0.04
2017-12-27 -0.01
2017-09-27 0.63
2017-06-28 0.59
2017-03-29 0.55
2016-12-28 0.54
2016-09-28 0.47
2016-06-29 0.41
2016-03-30 0.34

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Shake Shack is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Shake Shack's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Shake Shack has a total score of 4/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Shake Shack performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Shake Shack's growth in the last year to its industry (Hospitality).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Shake Shack has delivered over 20% year on year earnings growth in the past 5 years.
  • Shake Shack's 1-year earnings growth exceeds its 5-year average (1466.9% vs 32.8%)
  • Shake Shack's earnings growth has exceeded the US Hospitality industry average in the past year (1466.9% vs 1%).
Earnings and Revenue History
Shake Shack's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Shake Shack Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:SHAK Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-03-27 492.80 14.22 65.73
2018-12-26 459.31 15.18 63.46
2018-09-26 431.18 3.67 56.78
2018-06-27 406.14 3.65 54.33
2018-03-28 381.18 0.92 50.90
2017-12-27 358.81 -0.32 47.94
2017-09-27 335.95 16.06 45.42
2017-06-28 315.90 14.83 44.03
2017-03-29 291.06 13.25 42.05
2016-12-28 268.48 12.45 40.08
2016-09-28 246.27 9.77 37.24
2016-06-29 224.97 7.53 33.89
2016-03-30 206.95 5.35 31.60
2015-12-30 190.59 -8.78 29.67
2015-09-30 174.30 -11.45 29.67
2015-07-01 152.86 -12.47 29.51
2015-04-01 132.14 -11.64 26.98
2014-12-31 118.53 2.12 24.29
2014-09-24 106.71 4.54 17.88
2014-06-25 97.69 4.48 16.45
2014-03-26 88.30 4.52 14.36
2013-12-25 82.46 5.42 12.73
2012-12-26 57.04 4.13 8.85

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Shake Shack has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Shake Shack used its assets less efficiently than the US Hospitality industry average last year based on Return on Assets.
  • Shake Shack's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Shake Shack's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Hospitality industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Shake Shack has a total score of 3/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Shake Shack's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Shake Shack's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Shake Shack is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Shake Shack's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of Shake Shack's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is covered by short term assets, assets are 20.5x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Shake Shack Company Filings, last reported 2 months ago.

NYSE:SHAK Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-03-27 285.74 0.00 79.56
2018-12-26 273.46 0.00 86.86
2018-09-26 271.58 0.00 91.10
2018-06-27 256.45 0.00 92.28
2018-03-28 233.13 0.00 87.75
2017-12-27 224.48 0.00 84.54
2017-09-27 231.78 0.00 90.19
2017-06-28 221.00 0.00 85.54
2017-03-29 211.47 0.00 73.55
2016-12-28 201.35 0.00 73.65
2016-09-28 191.42 0.00 73.58
2016-06-29 178.63 0.00 68.37
2016-03-30 167.42 0.31 65.86
2015-12-30 157.02 0.31 71.12
2015-09-30 138.13 0.31 69.82
2015-07-01 115.35 0.31 64.92
2015-04-01 109.03 0.31 60.83
2014-12-31 12.60 32.31 2.68
2014-09-24 104.02 0.31 73.93
2014-06-25 36.69 0.31 5.84
2014-03-26 37.39 0.31 13.08
2013-12-25 37.39 0.31 13.08
2012-12-26 31.87 0.00 16.03
  • Shake Shack's level of debt (1.6%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (0.8% vs 1.6% today).
  • Debt is well covered by operating cash flow (1853.9%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 41.7x coverage).
X
Financial health checks
We assess Shake Shack's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Shake Shack has a total score of 4/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0%
Current annual income from Shake Shack dividends. Estimated to be 0% next year.
If you bought $2,000 of Shake Shack shares you are expected to receive $0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Unable to evaluate Shake Shack's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.
  • Unable to evaluate Shake Shack's dividend against the top 25% market benchmark as the company has not reported any payouts.
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NYSE:SHAK Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 11 Analyst Estimates (S&P Global) See Below
United States of America Hospitality Industry Average Dividend Yield Market Cap Weighted Average of 47 Stocks 2.8%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 2012 Stocks 2.4%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.4%
United States of America Top 25% Dividend Yield 75th Percentile 3.7%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NYSE:SHAK Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2022-12-31
2021-12-31 0.00 2.00
2020-12-31 0.00 2.00
2019-12-31 0.00 2.00

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to perform a dividend volatility check as Shake Shack has not reported any payouts.
  • Unable to verify if Shake Shack's dividend has been increasing as the company has not reported any payouts.
Current Payout to shareholders
What portion of Shake Shack's earnings are paid to the shareholders as a dividend.
  • Unable to calculate sustainability of dividends as Shake Shack has not reported any payouts.
Future Payout to shareholders
  • No need to calculate the sustainability of Shake Shack's dividends in 3 years as they are not expected to pay a notable one for United States of America.
X
Income/ dividend checks
We assess Shake Shack's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Shake Shack afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Shake Shack has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

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

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Randy Garutti
COMPENSATION $3,805,411
AGE 43
TENURE AS CEO 7.2 years
CEO Bio

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 2012. He served as Chief Operating Officer of SSE Holdings from January 2010 to April 2012. Prior to leading Shake Shack, he served as Director of Operations, overseeing the operations for all USHG restaurants. He served as General Manager of Union Square Cafe and Tabla, both of which won numerous accolades in the hospitality industry. Mr. Garutti is a Member of The Board of Directors of the Columbus Avenue Business Improvement District. He has worked with USHG and Mr. Meyer for 15 years. He has been a Director of Square, Inc. since July 19, 2017. He has been a Director of Shake Shack Inc. since April 2012. Mr. Garutti graduated from Cornell University's School of Hotel Administration in 1997.

CEO Compensation
  • Randy's compensation has been consistent with company performance over the past year, both up more than 20%.
  • Randy's remuneration is about average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Shake Shack management team in years:

2.2
Average Tenure
43
Average Age
  • The tenure for the Shake Shack management team is about average.
Management Team

Danny Meyer

TITLE
Founder & Chairman
COMPENSATION
$50K
AGE
60

Randy Garutti

TITLE
CEO & Director
COMPENSATION
$4M
AGE
43
TENURE
7.2 yrs

Tara Comonte

TITLE
Chief Financial Officer
COMPENSATION
$2M
AGE
44
TENURE
2 yrs

Zach Koff

TITLE
Chief Operating Officer
COMPENSATION
$526K
AGE
38
TENURE
2.4 yrs

Dave Harris

TITLE
Chief Information Officer
TENURE
0.3 yrs

Leo Rhodes

TITLE
Vice President of Finance & Investor Relations

Ron Palmese

TITLE
Senior VP
COMPENSATION
$1M
AGE
39

Edwin Bragg

TITLE
Vice President of Marketing & Communications
TENURE
2.3 yrs

Jay Livingston

TITLE
Chief Marketing Officer
TENURE
0.4 yrs

Diane Neville

TITLE
Senior Vice President of People Resources
Board of Directors Tenure

Average tenure and age of the Shake Shack board of directors in years:

6.5
Average Tenure
50
Average Age
  • The tenure for the Shake Shack board of directors is about average.
Board of Directors

Danny Meyer

TITLE
Founder & Chairman
COMPENSATION
$50K
AGE
60
TENURE
9.4 yrs

Randy Garutti

TITLE
CEO & Director
COMPENSATION
$4M
AGE
43
TENURE
7.2 yrs

Jeff Flug

TITLE
Director
COMPENSATION
$85K
AGE
56
TENURE
9.4 yrs

Robert Vivian

TITLE
Director
COMPENSATION
$95K
AGE
60
TENURE
9 yrs

Jenna Lyons

TITLE
Director
COMPENSATION
$75K
AGE
50
TENURE
4.5 yrs

Jon Sokoloff

TITLE
Director
COMPENSATION
$50K
AGE
61
TENURE
6.5 yrs

Josh Silverman

TITLE
Director
COMPENSATION
$75K
AGE
49
TENURE
2.6 yrs

Anna Fieler

TITLE
Director
COMPENSATION
$75K
AGE
46
TENURE
1.5 yrs

Sumaiya Balbale

TITLE
Director
AGE
37
TENURE
0.3 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month individual insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
04. Jun 19 Sell Leonard Green & Partners, L.P. Company 30. May 19 30. May 19 -21,144 $60.20 $-1,272,869
17. May 19 Sell Leonard Green & Partners, L.P. Company 15. May 19 15. May 19 -178,739 $61.30 $-10,889,767
16. May 19 Sell Leonard Green & Partners, L.P. Company 14. May 19 14. May 19 -114,169 $60.50 $-6,907,225
13. May 19 Sell Leonard Green & Partners, L.P. Company 09. May 19 13. May 19 -229,962 $60.30 $-13,843,801
14. Mar 19 Sell Leonard Green & Partners, L.P. Company 19. Feb 19 13. Mar 19 -389,921 $53.23 $-20,711,186
06. Dec 18 Sell Leonard Green & Partners, L.P. Company 03. Dec 18 03. Dec 18 -64,072 $55.54 $-3,343,769
30. Nov 18 Sell Jeffrey Flug Individual 29. Nov 18 30. Nov 18 -37,054 $54.27 $-1,983,911
26. Oct 18 Sell Select Equity Group, L.P. Company 24. Oct 18 24. Oct 18 -74,373 $53.15 $-3,813,216
24. Oct 18 Sell Select Equity Group, L.P. Company 22. Oct 18 23. Oct 18 -57,404 $54.56 $-3,074,685
24. Oct 18 Sell Select Equity Group, L.P. Company 18. Oct 18 19. Oct 18 -66,320 $58.22 $-3,775,751
12. Oct 18 Sell Select Equity Group, L.P. Company 10. Oct 18 10. Oct 18 -42,600 $59.99 $-2,500,611
03. Oct 18 Sell Select Equity Group, L.P. Company 01. Oct 18 01. Oct 18 -6,222 $62.83 $-386,646
21. Sep 18 Sell Select Equity Group, L.P. Company 19. Sep 18 19. Sep 18 -23,552 $57.76 $-1,360,420
13. Sep 18 Sell Leonard Green & Partners, L.P. Company 12. Sep 18 12. Sep 18 -500,000 $57.15 $-28,575,000
13. Sep 18 Sell Leonard Green & Partners, L.P. Company 10. Sep 18 10. Sep 18 -60,000 $58.60 $-3,516,000
11. Sep 18 Sell Jeffrey Flug Individual 07. Sep 18 10. Sep 18 -25,000 $59.03 $-1,460,362
10. Sep 18 Sell Leonard Green & Partners, L.P. Company 07. Sep 18 07. Sep 18 -40,000 $58.88 $-2,339,208
07. Sep 18 Sell Leonard Green & Partners, L.P. Company 04. Sep 18 06. Sep 18 -250,000 $59.74 $-14,840,502
05. Sep 18 Sell Jeffrey Flug Individual 30. Aug 18 31. Aug 18 -50,000 $59.57 $-2,962,310
30. Aug 18 Sell Select Equity Group, L.P. Company 28. Aug 18 28. Aug 18 -69,537 $58.25 $-4,050,822
03. Aug 18 Sell Select Equity Group, L.P. Company 01. Aug 18 01. Aug 18 -3,550 $61.30 $-217,617
23. Jul 18 Sell Select Equity Group, L.P. Company 19. Jul 18 20. Jul 18 -74,999 $69.27 $-5,131,508
05. Jul 18 Sell Select Equity Group, L.P. Company 02. Jul 18 02. Jul 18 -118,645 $65.23 $-7,739,356
X
Management checks
We assess Shake Shack's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Shake Shack has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Does Shake Shack Inc.'s (NYSE:SHAK) Stock Price Account For Its Growth?

The stock is trading at a lofty price-to-earnings (PE) ratio of 137.38x, telling us that Shake Shack is overvalued based on current earnings compared to the Hospitality industry average of 22.56x , and overvalued compared to the US market average ratio of 17.63x. … However, since Shake Shack is a high-growth stock, we must also account for its earnings growth by using calculation called the PEG ratio. … So, when we include the growth factor in our analysis, Shake Shack appears overvalued , based on fundamental analysis.

Simply Wall St -

Should You Be Worried About Insider Transactions At Shake Shack Inc. (NYSE:SHAK)?

So shareholders might well want to know whether insiders have been buying or selling shares in Shake Shack Inc. … But logic dictates you should pay some attention to whether insiders are buying or selling shares. … View our latest analysis for Shake Shack The Last 12 Months Of Insider Transactions At Shake Shack In the last twelve months, the biggest single sale by an insider was when the Director, Jeffrey Flug, sold US$3.0m worth of shares at a price of US$59.57 per share.

Simply Wall St -

Is Shake Shack Inc. (NYSE:SHAK) A Financially Sound Company?

View our latest analysis for Shake Shack SHAK’s Debt (And Cash Flows) SHAK's debt levels surged from US$17m to US$296m over the last 12 months , which accounts for long term debt. … With current liabilities at US$79m, it seems that the business has been able to meet these obligations given the level of current assets of US$92m, with a current ratio of 1.17x. … Next Steps: Although SHAK’s debt level is towards the higher end of the spectrum, its cash flow coverage seems adequate to meet obligations which means its debt is being efficiently utilised.

Simply Wall St -

Shake Shack Inc. (NYSE:SHAK) Delivered A Weaker ROE Than Its Industry

While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. … One way to conceptualize this, is that for each $1 of shareholders' equity it has, the company made $0.075 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

Shake Shack Inc.’s (NYSE:SHAK) Investment Returns Are Lagging Its Industry

Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business. … What is Return On Capital Employed (ROCE)? … ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business.

Simply Wall St -

Does The Shake Shack Inc. (NYSE:SHAK) Share Price Fall With The Market?

In finance, Beta is a measure of volatility. … Every stock in the market is exposed to this volatility, which is linked to the fact that stocks prices are correlated in an efficient market. … Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility).

Simply Wall St -

Did You Miss Shake Shack's (NYSE:SHAK) 54% Share Price Gain?

By buying an index fund, investors can approximate the average market return. … But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. … One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Simply Wall St -

Have Insiders Been Selling Shake Shack Inc. (NYSE:SHAK) Shares?

The Last 12 Months Of Insider Transactions At Shake Shack. … In the last twelve months, the biggest single sale by an insider was when Director Jeffrey Flug sold US$3.9m worth of shares at a price of US$41.31 per share. … That means that an insider was selling shares at slightly below the current price (US$52.89)

Simply Wall St -

Shake Shack Inc. (NYSE:SHAK) Delivered A Weaker ROE Than Its Industry

This article is for those who would like to learn about Return On Equity (ROE). … Our data shows Shake Shack has a return on equity of 4.2% for the last year. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

Does Shake Shack Inc.'s (NYSE:SHAK) CEO Salary Compare Well With Others?

This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. … How Does Randy Garutti's Compensation Compare With Similar Sized Companies. … has a market cap of US$1.7b, and is paying total annual CEO compensation of US$1.1m.

Simply Wall St -

Company Info

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 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.

Details
Name: Shake Shack Inc.
SHAK
Exchange: NYSE
Founded: 2004
$2,478,986,470
$1,984,064,074
37,155,073
Website: http://www.shakeshack.com
Address: Shake Shack Inc.
225 Varick Street,
Suite 301,
New York,
New York, 10014,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NYSE SHAK Class A Common Stock New York Stock Exchange US USD 30. Jan 2015
DB 9SH Class A Common Stock Deutsche Boerse AG DE EUR 30. Jan 2015
LSE 0L5R Class A Common Stock London Stock Exchange GB USD 30. Jan 2015
BMV SHAK * Class A Common Stock Bolsa Mexicana de Valores MX MXN 30. Jan 2015
Number of employees
Current staff
Staff numbers
6,101
Shake Shack employees.
Industry
Restaurants
Consumer Services
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/06/26 01:04
End of day share price update: 2019/06/25 00:00
Last estimates confirmation: 2019/06/25
Last earnings filing: 2019/05/06
Last earnings reported: 2019/03/27
Last annual earnings reported: 2018/12/26


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.