Shake Shack Inc. (SHAK)
Valuation Overview•Is Shake Shack Inc. Overvalued or Undervalued?
Trading at a discount compared to peers, but the underlying intrinsic cash flows struggle to support the current price.
Fragile underlying quality score of 45/100; weak margins or elevated debt leverage warrant caution.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. The company currently retains all capital for reinvestment and growth rather than returning it to shareholders.
SHAK struggles with subpar profitability and pressured margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company is driving exceptional top-line expansion (17.1% 3Y CAGR) paired with stable bottom-line earnings. However, profitability remains a major concern with severely compressed operating margins (4.8%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $366.7M | +15.4% | +17.1% | +22.6% | +22.5% | |
| EBITDA | $34.7M | — | +59.5% | — | — | |
| Net Income | -$290K | +348.0% | — | — | — | |
| EPS (Diluted) | $-0.01 | +354.2% | — | — | — | |
| Free Cash Flow | -$17.2M | +58.5% | — | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 19.2% | 35.9% | 38.3% | 41.8% |
| Operating Margin | 4.8% | 2.2% | 0.3% | 2.4% |
| Net Margin | 2.8% | 1.9% | 0.6% | 0.6% |
| FCF Margin | 2.5% | 1.8% | -1.5% | -1.4% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.11 | $-0.00 | -101.3% | ||
| Q1'26 | $0.35 | $0.37 | +6.0% | ||
| Q4'25 | $0.32 | $0.36 | +13.1% | ||
| Q3'25 | $0.37 | $0.44 | +18.9% | ||
| Q2'25 | $0.16 | $0.14 | -12.5% | ||
| Q1'25 | $0.25 | $0.26 | +4.0% | ||
| Q4'24 | $0.20 | $0.25 | +25.0% | ||
| Q3'24 | $0.27 | $0.27 | +0.0% |
Total return is -54.0% (1Y), lagging the benchmark by -79.0%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -29.2% | -38.5% | — |
| 1Y | -54.0% | -79.0% | — |
| 3YCAGR | -7.2% | -26.9% | — |
| 5YCAGR | -8.9% | -22.0% | — |
| 10YCAGR | +4.8% | -8.8% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Shake Shack Inc. (SHAK) valuation, health, and returns.
Shake Shack Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Slightly cheap versus peers compared to industry peers. overvalued (implying -60.9% downside from DCF intrinsic value of $23.12)
Shake Shack Inc. has multiple valuation anchors: DCF Intrinsic Value: $23.12 | Peer Relative Fair Value: $65.53 | Wall Street Analyst Target: $90.58 (implying +53.3% upside). A convergence of these signals offers higher conviction.
Shake Shack Inc. displays fair financial health with a composite quality score of 45/100, supported by a Altman Z-Score of 1.5 (distress zone), Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 6.0%.
Shake Shack Inc. does not return material capital to shareholders via dividends or share repurchases, electing to retain earnings to fund internal growth.
Shake Shack Inc.'s current growth trajectory is Stable. The company achieved +15.4% 1Y revenue growth and +354.2% 1Y EPS growth, compared to its 3Y revenue CAGR of +17.1%.
Wall Street consensus is Buy based on 37 analysts, beating EPS expectations in 75% of recent quarters with a -1-quarter streak. The consensus price target represents a +53.3% change from current levels.
Investment risks for Shake Shack Inc. include: -63.1% 1-year max drawdown, high beta (1.53x market volatility), elevated distress risk. Volatility risk is characterized by a beta of 1.53x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.