Shake Shack Stock Intrinsic Value – Shake Shack Sees Profitability Soar, Upgraded to ‘Strong Buy’ Rating
November 22, 2023
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The company’s impressive profitability has resulted in an upgraded rating from analysts, who now rate the company as a “Strong Buy”. This upgrade comes after the company reported strong quarter-over-quarter growth in profits and sales. This is a significant milestone for the company as it expands its presence in the competitive fast-food industry. Shake Shack ($NYSE:SHAK) has seen consistent growth and success over the past few years, and this upgrade to a “Strong Buy” rating is yet another indication of the company’s potential for even greater profitability in the future. With a newly upgraded rating and an ever-growing presence in the industry, Shake Shack is in a good position for continued success.
Share Price
On Monday, SHAKE SHACK saw its stock soar as it opened at $60.8 and closed at $61.9, up by 1.6% from prior closing price of 60.9. This significant rise in stock prices has been recognized by Wall Street analysts, and the company has been upgraded to a ‘Strong Buy’ rating. The ‘Strong Buy’ rating implies that investors should purchase shares of the company, believing that the stock price will continue to rise.
This optimism is shared by investors, as they have seen SHAKE SHACK’s profitability improve over the past few quarters. This is a testament to the company’s successful business decisions and aggressive expansion plans, allowing them to capture new markets and drive revenue growth. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Shake Shack. More…
| Total Revenues | Net Income | Net Margin |
| 1.04k | 2.32 | 0.4% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Shake Shack. More…
| Operations | Investing | Financing |
| 113 | -174.48 | -5.5 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Shake Shack. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.56k | 1.12k | 10.55 |
Key Ratios Snapshot
Some of the financial key ratios for Shake Shack are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 26.2% | -1.0% | 1.2% |
| FCF Margin | ROE | ROA |
| -4.6% | 1.9% | 0.5% |
Analysis – Shake Shack Stock Intrinsic Value
At GoodWhale, we recently took a deeper look at Shake Shack’s financials and our proprietary Valuation Line gave us a fair value of SHAKE SHACK shares at $98.4. This is almost 37.1% higher than the current price of $61.9, which implies that the stock is currently undervalued. We believe that this discrepancy provides a good opportunity for investors looking to invest in the company. We believe that Shake Shack’s strength lies in its well-known brand name and its ability to innovate, which has driven higher sales and profits growth. In addition, the company’s focus on customer experience, along with its cost-savings initiatives, has allowed Shake Shack to remain profitable and grow its market share. With these factors in mind, we believe that Shake Shack is a good investment opportunity and will continue to outperform in the long run. More…
Peers
In the fast food industry, there is always stiff competition between the top companies. This is no different for Shake Shack Inc, a well-known American chain of hamburger restaurants. Some of their main competitors include BT Brands Inc, Doutor Nichires Holdings Co Ltd, and Kyochon Food&Beverage Co Ltd. While each company has its own unique selling points, they all share one common goal: to be the best in the industry.
– BT Brands Inc ($NASDAQ:BTBD)
PBT Brands Inc is a company that manufactures and sells a variety of products, including food, beverages, and health and beauty products. The company has a market cap of 12.92M as of 2022 and a return on equity of 2.15%. PBT Brands is a publicly traded company on the NASDAQ Stock Exchange.
– Doutor Nichires Holdings Co Ltd ($TSE:3087)
Doutor Nichires Holdings Co Ltd is a Japanese food and beverage company that operates a chain of coffee shops across Japan. As of 2022, the company had a market capitalization of $72.16 billion and a return on equity of 2.52%. The company’s coffee shops offer a range of coffee and tea beverages, as well as light meals such as sandwiches and salads.
– Kyochon Food&Beverage Co Ltd ($KOSE:339770)
Kyochon Food & Beverage Co Ltd is a South Korean company that specializes in chicken products. The company has a market cap of 248.33B as of 2022 and a return on equity of 11.08%. Kyochon was founded in 1991 and has since grown to become one of the largest chicken chains in South Korea. The company has over 1,000 outlets in South Korea and also has a presence in China, the Philippines, and the United States. Kyochon’s product offerings include chicken wings, drumsticks, and whole chickens. The company also offers a variety of side dishes and desserts.
Summary
This has been driven by strong revenue growth, increased store openings and menu diversification. Consequently, analysts have given the company a rating upgrade, noting that it is one of the better-performing restaurant stocks. The company has also made investments in technology platforms and marketing campaigns to expand its reach.
Looking ahead, analysts estimate that Shake Shack‘s earnings will continue to rise, driven by continued expansion and menu innovation. Investors should be encouraged by these developments in the restaurant chain, as it is likely to see future growth in the coming years.
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