Investors and analysts responded positively to Shake Shack’s recent performance over the last three months.
This week, news from Shake Shack, marked by the stock ticker SHAK, showed significant growth, leading to a substantial double-digit increase in its stock price over the last five trading days. As reported by S&P Global Market Intelligence, the company’s stock price rose by over 12% by the end of the week. This appreciation was largely driven by the company’s latest quarterly results and a series of upward revisions in analysts’ target prices.
On Wednesday, Shake Shack announced its third-quarter financial results. The company reported a 15% year-over-year increase in revenue, reaching $317 million. This growth was attributed to new restaurant openings and an over 4% rise in same-restaurant sales. Moreover, Shake Shack’s adjusted net income, referred to as “pro forma” or “non-GAAP,” increased by 48%, totaling just over $11.1 million, or $0.25 per share. This performance surpassed analysts’ expectations, who had projected less than $316 million in revenue and an adjusted profitability of $0.19 per share.
Following the earnings report, several analysts revised their assessments of Shake Shack upwards. By the close of business on Friday, at least seven analysts had increased their price targets for the stock, contributing to positive sentiment around the company. Among these analysts was Jake Bartlett from Truist Securities, who raised his fair value estimate for the stock from $127 to $144 per share, while maintaining a buy recommendation. His research note indicated that the management has been successful in establishing an effective pricing and value strategy and has excelled in marketing and service speed at their restaurants.
Eric Volkman has no financial interest in any of the mentioned stocks. The Motley Fool holds positions in and recommends Truist Financial. The company’s disclosure policy is accessible for more details.
