Shake Shack (NYSE:SHAK) Rating Lowered to Strong Sell at Zacks Research

Key Points

• Zacks Research downgraded Shake Shack from a “hold” to a “strong sell,” and also cut its earnings estimates for multiple future quarters and full years, signaling a more cautious outlook.
• Analyst sentiment remains mixed overall: while several firms still have bullish ratings and the consensus rating is “Hold,” the average price target sits at $91.00, well above the stock’s recent trading level.
• Shake Shack’s shares were trading near recent lows, opening at $54.24 versus a 1-year high of $144.65, even as insiders bought shares and hedge funds continued to hold a large stake in the company.

Shake Shack (NYSE:SHAK - Get Free Report) was downgraded by equities researchers at Zacks Research from a "hold" rating to a "strong sell" rating in a research note issued to investors on Tuesday,Zacks.com reports. Zacks Research also issued estimates for Shake Shack's Q1 2027 earnings at $0.07 EPS, Q2 2027 earnings at $0.43 EPS, Q3 2027 earnings at $0.36 EPS, Q4 2027 earnings at $0.40 EPS, FY2027 earnings at $1.26 EPS, Q1 2028 earnings at $0.23 EPS, Q2 2028 earnings at $0.51 EPS and FY2028 earnings at $1.68 EPS.

SHAK has been the subject of several other research reports. Mizuho set a $100.00 price target on shares of Shake Shack in a research report on Friday, May 8th. The Goldman Sachs Group reissued a "buy" rating on shares of Shake Shack in a research report on Friday, May 8th. Oppenheimer set a $82.00 price target on shares of Shake Shack and gave the stock an "outperform" rating in a report on Tuesday, June 2nd. Wells Fargo & Company dropped their price objective on Shake Shack from $80.00 to $65.00 and set an "equal weight" rating on the stock in a research note on Wednesday, June 3rd. Finally, BNP Paribas Exane dropped their price objective on Shake Shack from $100.00 to $77.00 and set an "outperform" rating on the stock in a research note on Thursday, June 4th. Fifteen analysts have rated the stock with a Buy rating, ten have issued a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, the stock has a consensus rating of "Hold" and an average price target of $91.00.

Shake Shack Trading Down 1.2%

Shares of Shake Shack stock opened at $54.24 on Tuesday. The firm has a market cap of $2.32 billion, a PE ratio of 55.35, a P/E/G ratio of 2.44 and a beta of 1.63. Shake Shack has a 1 year low of $51.60 and a 1 year high of $144.65. The company has a debt-to-equity ratio of 0.45, a current ratio of 1.69 and a quick ratio of 1.66. The stock has a fifty day moving average price of $63.12 and a 200-day moving average price of $82.05.

Insider Buying and Selling

In other Shake Shack news, Director Daniel Harris Meyer bought 32,258 shares of the stock in a transaction on Friday, May 15th. The shares were acquired at an average price of $61.88 per share, with a total value of $1,996,125.04. Following the acquisition, the director directly owned 378,670 shares of the company's stock, valued at $23,432,099.60. The trade was a 9.31% increase in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, Director Sumaiya Balbale bought 4,068 shares of the company's stock in a transaction on Friday, May 15th. The shares were bought at an average price of $61.42 per share, for a total transaction of $249,856.56. Following the transaction, the director owned 13,407 shares of the company's stock, valued at approximately $823,457.94. This represents a 43.56% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. Over the last quarter, insiders have purchased 50,616 shares of company stock valued at $3,109,782. Corporate insiders own 8.32% of the company's stock.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in the stock. Intech Investment Management LLC increased its holdings in shares of Shake Shack by 40.1% in the fourth quarter. Intech Investment Management LLC now owns 77,916 shares of the company's stock worth $6,324,000 after purchasing an additional 22,287 shares during the period. Divisadero Street Capital Management LP grew its position in Shake Shack by 407.8% during the third quarter. Divisadero Street Capital Management LP now owns 56,985 shares of the company's stock worth $5,334,000 after buying an additional 45,762 shares in the last quarter. Madison Asset Management LLC increased its stake in Shake Shack by 37.3% in the 4th quarter. Madison Asset Management LLC now owns 58,404 shares of the company's stock worth $4,741,000 after acquiring an additional 15,852 shares during the last quarter. Jefferies Financial Group Inc. bought a new position in Shake Shack in the 4th quarter worth about $2,898,000. Finally, 12 West Capital Management LP raised its holdings in shares of Shake Shack by 13.6% in the 3rd quarter. 12 West Capital Management LP now owns 1,753,595 shares of the company's stock valued at $164,154,000 after acquiring an additional 210,000 shares in the last quarter. Hedge funds and other institutional investors own 86.07% of the company's stock.

Key Headlines Impacting Shake Shack

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

• Negative Sentiment: Zacks Research lowered Shake Shack’s Q1 2027 EPS estimate to $0.07 from $0.13, signaling weaker expected profitability in the near term.
• Negative Sentiment: The firm also trimmed Q2 2027, Q3 2027, Q4 2027, Q1 2028, and Q2 2028 estimates, pointing to a more conservative outlook across several future quarters.
• Negative Sentiment: FY2027 EPS was cut to $1.26 from $1.39, and FY2028 EPS was reduced to $1.68 from $1.81, which may weigh on valuation expectations. SHAK analyst estimate updates
• Neutral Sentiment: Additional media coverage touched on Shake Shack in broader restaurant and consumer-food stories, but these items did not appear to be material stock-moving catalysts. Dairy Queen hires Shake Shack vet to modernize tech

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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