Peeling Back The Layers: Exploring Shake Shack Through Analyst Insights

In the latest quarter, 6 analysts provided ratings for Shake Shack SHAK, showcasing a mix of bullish and bearish perspectives.

The table below provides a snapshot of their recent ratings, showcasing how sentiments have evolved over the past 30 days and comparing them to the preceding months.

Analysts have set 12-month price targets for Shake Shack, revealing an average target of $82.0, a high estimate of $88.00, and a low estimate of $74.00. Observing a 3.8% increase, the current average has risen from the previous average price target of $79.00.

Understanding Analyst Ratings: A Comprehensive Breakdown

The perception of Shake Shack by financial experts is analyzed through recent analyst actions. The following summary presents key analysts, their recent evaluations, and adjustments to ratings and price targets.

Key Insights:

• Action Taken: Analysts frequently update their recommendations based on evolving market conditions and company performance. Whether they 'Maintain', 'Raise' or 'Lower' their stance, it reflects their reaction to recent developments related to Shake Shack. This information provides a snapshot of how analysts perceive the current state of the company.
• Rating: Analysts assign qualitative assessments to stocks, ranging from 'Outperform' to 'Underperform'. These ratings convey the analysts' expectations for the relative performance of Shake Shack compared to the broader market.
• Price Targets: Understanding forecasts, analysts offer estimates for Shake Shack's future value. Examining the current and prior targets provides insight into analysts' changing expectations.

To gain a panoramic view of Shake Shack's market performance, explore these analyst evaluations alongside essential financial indicators. Stay informed and make judicious decisions using our Ratings Table.

Stay up to date on Shake Shack analyst ratings.

All You Need to Know About Shake Shack

Shake Shack Inc is a roadside burger stands. It is serving a classic American menu of premium burgers, hot dogs, crispy chicken, frozen custard, crinkle-cut fries, shakes, beer, wine and more. The company's burgers are made with a whole-muscle blend of all-natural, hormone and antibiotic-free Angus beef, ground fresh daily, cooked to order and served on a non-genetically modified organism (GMO) potato bun. Its menu focuses on food and beverages, crafted from a range of classic American foods. The company serves draft Root Beer, seasonal freshly-squeezed lemonade, organic fresh brewed iced tea, cold brew coffee, organic apple juice, and Shack20 bottled water.

Understanding the Numbers: Shake Shack's Finances

Market Capitalization Analysis: Reflecting a smaller scale, the company's market capitalization is positioned below industry averages. This could be attributed to factors such as growth expectations or operational capacity.

Positive Revenue Trend: Examining Shake Shack's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 21.24% as of 30 September, 2023, showcasing a substantial increase in top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Consumer Discretionary sector.

Net Margin: Shake Shack's financial strength is reflected in its exceptional net margin, which exceeds industry averages. With a remarkable net margin of 2.76%, the company showcases strong profitability and effective cost management.

Return on Equity (ROE): The company's ROE is below industry benchmarks, signaling potential difficulties in efficiently using equity capital. With an ROE of 1.85%, the company may need to address challenges in generating satisfactory returns for shareholders.

Return on Assets (ROA): Shake Shack's ROA lags behind industry averages, suggesting challenges in maximizing returns from its assets. With an ROA of 0.49%, the company may face hurdles in achieving optimal financial performance.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 1.84.

The Basics of Analyst Ratings

Analysts work in banking and financial systems and typically specialize in reporting for stocks or defined sectors. Analysts may attend company conference calls and meetings, research company financial statements, and communicate with insiders to publish "analyst ratings" for stocks. Analysts typically rate each stock once per quarter.

Some analysts publish their predictions for metrics such as growth estimates, earnings, and revenue to provide additional guidance with their ratings. When using analyst ratings, it is important to keep in mind that stock and sector analysts are also human and are only offering their opinions to investors.

This article was generated by Benzinga's automated content engine and reviewed by an editor.