Shake Shack (NYSE:SHAK) Rating Increased to Hold at Zacks Research

Key Points

• Zacks Research upgraded Shake Shack from “strong sell” to “hold,” while broader analyst coverage remains more favorable with a consensus “moderate buy” rating and average price target of $89.74.
• Shake Shack’s latest quarterly results beat expectations, with EPS of $0.43 versus the $0.31 estimate and revenue of $417.62 million, up 17.2% year over year.
• Profitability remains a concern: Beef inflation and higher operating costs pressured earnings, while the stock trades at a high valuation; meanwhile, insiders bought more than $3.1 million of shares over the past 90 days.

Shake Shack (NYSE:SHAK - Get Free Report) was upgraded by analysts at Zacks Research from a "strong sell" rating to a "hold" rating in a research report issued to clients and investors on Wednesday,Zacks.com reports.

Several other research firms have also recently commented on SHAK. Barclays cut their price target on Shake Shack from $118.00 to $96.00 and set an "overweight" rating for the company in a research note on Friday, May 8th. Weiss Ratings lowered shares of Shake Shack from a "sell (d+)" rating to a "sell (d)" rating in a research report on Monday, June 8th. Guggenheim dropped their price objective on shares of Shake Shack from $120.00 to $100.00 and set a "buy" rating on the stock in a research note on Monday, May 11th. TD Cowen restated a "hold" rating on shares of Shake Shack in a research report on Wednesday. Finally, Citigroup restated a "buy" rating on shares of Shake Shack in a research note on Wednesday, June 3rd. Fifteen analysts have rated the stock with a Buy rating, eleven have assigned a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and an average price target of $89.74.

Shake Shack Stock Performance

Shares of SHAK stock opened at $70.17 on Wednesday. The stock has a market capitalization of $3.00 billion, a PE ratio of 74.65, a price-to-earnings-growth ratio of 5.90 and a beta of 1.63. Shake Shack has a 52-week low of $51.60 and a 52-week high of $114.39. The stock's 50-day moving average price is $58.50 and its 200 day moving average price is $78.03. The company has a quick ratio of 1.66, a current ratio of 1.67 and a debt-to-equity ratio of 0.43.

Shake Shack (NYSE:SHAK - Get Free Report) last posted its quarterly earnings data on Wednesday, August 5th. The company reported $0.43 EPS for the quarter, beating the consensus estimate of $0.31 by $0.12. Shake Shack had a return on equity of 9.29% and a net margin of 2.56%.The firm had revenue of $417.62 million during the quarter, compared to the consensus estimate of $417.18 million. During the same period in the prior year, the business earned $0.44 EPS. The firm's revenue was up 17.2% compared to the same quarter last year. As a group, equities research analysts forecast that Shake Shack will post 1.1 EPS for the current year.

Insiders Place Their Bets

In other Shake Shack news, Director Josh Silverman bought 8,290 shares of Shake Shack stock in a transaction on Friday, May 15th. The stock was bought at an average price of $60.38 per share, with a total value of $500,550.20. Following the completion of the acquisition, the director owned 8,290 shares in the company, valued at $500,550.20. The trade was a ∞ increase in their ownership of the stock. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this link. Also, CEO Robert Lynch bought 5,000 shares of Shake Shack stock in a transaction on Friday, May 15th. The stock was acquired at an average cost of $60.39 per share, with a total value of $301,950.00. Following the acquisition, the chief executive officer owned 77,845 shares of the company's stock, valued at $4,701,059.55. This trade represents a 6.86% increase in their position. The SEC filing for this purchase provides additional information. Over the last ninety days, insiders acquired 50,616 shares of company stock worth $3,109,782. Corporate insiders own 8.32% of the company's stock.

Hedge Funds Weigh In On Shake Shack

Large investors have recently made changes to their positions in the stock. Geneos Wealth Management Inc. purchased a new stake in Shake Shack during the first quarter worth about $26,000. Hilton Head Capital Partners LLC purchased a new position in Shake Shack in the fourth quarter valued at about $25,000. Assetmark Inc. increased its holdings in Shake Shack by 457.6% in the fourth quarter. Assetmark Inc. now owns 368 shares of the company's stock valued at $30,000 after buying an additional 302 shares in the last quarter. UMB Bank n.a. increased its holdings in Shake Shack by 42.2% in the fourth quarter. UMB Bank n.a. now owns 391 shares of the company's stock valued at $32,000 after buying an additional 116 shares in the last quarter. Finally, Advisory Services Network LLC acquired a new stake in shares of Shake Shack during the 3rd quarter valued at approximately $38,000. Hedge funds and other institutional investors own 86.07% of the company's stock.

Key Stories Impacting Shake Shack

Here are the key news stories impacting Shake Shack this week:

• Positive Sentiment: Activist investor involvement: Starboard Value disclosed a stake worth several hundred million dollars. The investment may increase pressure for operational improvements, margin expansion or other shareholder-friendly actions, initially supporting investor sentiment. Starboard Value discloses a sizable Shake Shack stake
• Positive Sentiment: Analysts raised price targets: DA Davidson lifted its target from $70 to $85 and upgraded the stock to “buy,” while BNP Paribas Exane raised its target from $77 to $81 and assigned an “outperform” rating. The revisions suggest analysts see meaningful upside despite recent volatility. Shake Shack analyst price-target revisions
• Positive Sentiment: Quarterly results exceeded expectations: Second-quarter earnings were $0.43 per share versus the $0.31 consensus estimate, while revenue reached $417.62 million, essentially matching estimates and increasing 17.2% year over year. Shake Shack also expects fiscal 2026 revenue of approximately $1.6 billion to $1.7 billion and plans to open 60 to 65 company-operated restaurants. Shake Shack Q2 earnings and revenue results
• Neutral Sentiment: Expansion and brand coverage: New restaurants in Highland Village and Stuyvesant Plaza, along with favorable consumer coverage of Shake Shack’s frozen custard, support continued brand growth but are unlikely to materially change near-term earnings expectations. Shake Shack Highland Village opening
• Negative Sentiment: Margin pressure remains the key concern: Beef inflation and higher operating expenses caused profit to slip from $0.44 per share a year ago to $0.43, despite strong revenue growth. Management’s shift to annual-only guidance also reduces near-term visibility, while the stock’s high earnings multiple leaves less room for execution disappointments. Shake Shack revenue rises while profit slips

About Shake Shack

Shake Shack, Inc NYSE: SHAK is a publicly traded hospitality company known for its modern take on the classic American roadside burger stand. The company operates a chain of quick-casual restaurants offering premium hamburgers, hot dogs, crinkle-cut fries, frozen custard, milkshakes and a curated selection of beer and wine. Shake Shack emphasizes high-quality ingredients, including 100% all-natural Angus beef with no hormones or antibiotics, and works with local suppliers where possible to maintain its commitment to fresh, responsibly sourced food.

Shake Shack traces its origins to a hot dog cart opened in New York City's Madison Square Park in 2001 by Danny Meyer's Union Square Hospitality Group.

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