SHAK - Shake Shack: Priced With Too Much Growth Anticipation

2024-05-06 11:16:02 ET

Summary

• Shake Shack has grown revenues aggressively, and continues the growth story anticipating 12-15% in revenue growth in 2024.
• The company's profitability needs to improve from currently very thin operating income, and while progress has been made, an improvement into a good level seems to take time.
• The current valuation prices in way too much earnings growth, making the stock a low risk-to-reward investment at the current price in my opinion.

Founded in 2001, Shake Shack (SHAK) operates and licenses restaurants in the United States as well as other countries. Since the company's IPO in early 2015, Shake Shack's stock has appreciated well at a CAGR of around 10.3%. The stock has rallied by over 100% in the past year as Shake Shack's growth story has continued, and the company has been able to slowly improve its profitability....

For further details see: