Skip to main content

Market Overview

Shake Shack's Quarter Was Great, But Valuation Still Holding Back Buyers

Share:
Shake Shack's Quarter Was Great, But Valuation Still Holding Back Buyers
  • Shake Shack Inc (NYSE: SHAK) has seen an 11.18 percent increase in its share price since the low of $39.05 on February 17.
  • Longbow’s Alton Stump has maintained a Neutral rating on the company.
  • Although the company has reported “impressive” Q3 results, the Neutral rating has been maintained due to valuation.

Analyst Alton Stump stated that the company reported its 3Q15 EBITDA ahead of the estimate and the consensus, with comparable sales rising an “impressive” 17.1 percent during the quarter, meaningfully ahead of expectations.

According to the Longbow report, “Shake Shack’s impressive reported comparable sales growth in 3Q15 provides evidence that fast-casual burger chains continue to gain share within the domestic restaurant industry.”

Related Link: Shake Shack Posts Upbeat Q3 Results, Issues Strong Revenue Forecast

Management has raised its revenue and comparable sales growth guidance for 2015, while guiding to total revenue of $237-$242 million, with comp sales growth of 2.5-3.0 percent and 8 international license openings for 2016.

“While we still have concerns related to the valuation carried by SHAK, the company’s impressive comp acceleration reported over the last four quarters could set the stage for further comp upside in coming quarters driven in large part by incremental rate pricing/mix,” the report added.

The EBITDA estimate for 4Q15 had been raised to reflect higher comp sales growth and operating leverage. The EBITDA estimates for 2015 and 2016 have also been raised, as have the EPS estimates for 4Q15, 2015 and 2016.

Latest Ratings for SHAK

DateFirmActionFromTo
Feb 2022JP MorganMaintainsUnderweight
Feb 2022Credit SuisseMaintainsNeutral
Feb 2022Deutsche BankMaintainsHold

View More Analyst Ratings for SHAK

View the Latest Analyst Ratings

 

Related Articles (SHAK)

View Comments and Join the Discussion!

Posted-In: Alton Stump Longbow ResearchAnalyst Color Reiteration Restaurants Analyst Ratings General Best of Benzinga

Latest Ratings

StockFirmActionPT
SEDGB of A SecuritiesMaintains411.0
PTLOPiper SandlerMaintains28.0
AOUTLake StreetMaintains26.0
RAPTPiper SandlerMaintains52.0
OCXLake StreetMaintains6.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com