Latest news with #SHAK
Yahoo
20-05-2025
- Business
- Yahoo
TD Cowen Downgrades Shake Shack (SHAK) to Hold, Maintains $105 PT
On Monday, TD Cowen downgraded Shake Shack Inc. (NYSE:SHAK) from Buy to Hold, while maintaining its previous price target of $105. The firm stated that the current share price is trading above its 3-year average, and the challenging environment for restaurant spending will likely limit further multiple expansion. This is particularly true in the competitive burger category, where Shake Shack lacks a dominant position. A cook in a busy kitchen preparing a delicious cooking of burgers and fries. TD Cowen believes that Shake Shack's margin improvement story has largely played out, which reduces the potential for significant future positive revisions to adjusted EBITDA. The rating downgrade comes after Shake Shack reported its Q1 2025 results on May 1 and highlighted a 10.5% year-over-year increase in total revenue to $320.9 million with system-wide sales of $489.4 million. Shake Shack opened 11 new Shacks system-wide in the quarter and plans to open 45 to 50 company-operated locations in 2025. Negative points from Q1 included the traffic decline, macroeconomic challenges like high beef costs and wage inflation, and a roughly 1% decline in same-shack sales in April. Shake Shack Inc.'s (NYSE:SHAK) owns, operates, and licenses Shake Shack restaurants (also just called Shacks) in the US and internationally. While we acknowledge the potential of SHAK to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SHAK and that has 100x upside potential, check out our report about the cheapest AI stock. READ NEXT: and . Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
SHAK Q1 Earnings Call: Operational Gains Offset Soft Sales Amid Expansion Push
Fast-food chain Shake Shack (NYSE:SHAK) fell short of the market's revenue expectations in Q1 CY2025, but sales rose 10.5% year on year to $320.9 million. Its non-GAAP profit of $0.14 per share was 12.4% below analysts' consensus estimates. Is now the time to buy SHAK? Find out in our full research report (it's free). Revenue: $320.9 million vs analyst estimates of $327.4 million (10.5% year-on-year growth, 2% miss) Adjusted EPS: $0.14 vs analyst expectations of $0.16 (12.4% miss) Adjusted EBITDA: $40.75 million vs analyst estimates of $41.94 million (12.7% margin, 2.8% miss) Operating Margin: 0.9%, in line with the same quarter last year Free Cash Flow was $1.87 million, up from -$2.39 million in the same quarter last year Locations: 589 at quarter end, up from 525 in the same quarter last year Same-Store Sales were flat year on year (1.6% in the same quarter last year) Market Capitalization: $4.67 billion Shake Shack's first quarter of 2025 highlighted management's focus on operational improvements and margin expansion, even as the company contended with flat same-store sales and macro pressures. CEO Rob Lynch attributed the quarter's results to better restaurant-level productivity and ongoing cost-control initiatives, noting, 'this marks the highest first quarter restaurant-level profit margin since 2019.' The company faced headwinds from adverse weather, elevated beef and wage costs, and sluggish traffic in key urban markets, but responded by prioritizing cost efficiencies and refining labor models. Leadership explained that operational agility and menu innovation were central to navigating a challenging environment, while outlining a strategy for continued expansion and cost reduction. Operational model transformation: Management credited improved labor planning and productivity tools for higher restaurant-level profitability, emphasizing that new labor models rolled out in late 2024 enabled teams to quickly adjust to traffic swings and macro headwinds. Menu and culinary innovation: The company underscored a shift to more frequent limited-time offerings (LTOs)—such as the Dubai Chocolate Pistachio Shake and summer barbecue menu—to draw traffic and enhance guest engagement. New menu boards and combo offerings, especially in drive-thru locations, were highlighted as drivers of improved order speed and guest satisfaction. Geographic performance divergence: Markets less affected by weather, such as those in the Southeast and Southwest, posted stronger sales growth compared to core urban regions (New York, Los Angeles, Washington, D.C.), which experienced disproportionate declines due to weather and tourism-related macro factors. Expansion and new formats: Shake Shack reaffirmed its accelerated unit growth strategy, aiming to open up to 50 company-operated locations in 2025, with emphasis on drive-thru and new market entries. Supply chain and construction cost reduction remained a priority, with management reiterating a target to reduce build costs by at least 10% this year. Digital engagement and loyalty: The company introduced new guest recognition and targeted incentive platforms in its app and web channels, with early results showing promise in driving multi-visit frequency and improving digital mix, which reached 38% of sales in the quarter. Shake Shack's outlook for 2025 centers on leveraging operational gains, menu innovation, and accelerated location growth to drive revenue, while monitoring economic headwinds and input costs. Margin expansion focus: Management expects at least 50 basis points of annual restaurant-level profit margin improvement for the next three years, driven by further operational and supply chain efficiencies rather than aggressive menu price increases. Menu innovation cadence: The rollout of more frequent LTOs across menu categories, including beverages and sides, is intended to attract new guests and increase frequency, helping counterbalance traffic softness and limited pricing actions. Geographic diversification: Continued expansion into high-growth markets in the Southeast and Southwest is expected to reduce dependency on historically volatile urban markets, while drive-thru formats provide access to new customer segments. Brian Vaccaro (Raymond James): Asked how Shake Shack achieved margin expansion despite flat sales. Management credited labor model improvements and operational discipline, noting ongoing productivity initiatives in both operations and supply chain. Christine Cho (Goldman Sachs): Inquired about drive-thru combo tests. CEO Rob Lynch shared that new digital menu boards and combo strategies improved order speed and guest satisfaction, with plans to expand combos across all drive-thrus. Michael Tamas (Oppenheimer): Probed confidence in achieving low-single-digit same-store sales for the year. Management cited increasing menu innovation and marketing activations as key drivers for expected improvement in the back half of 2025. Sharon Zackfia (William Blair): Questioned the balance between frequent LTOs and operational complexity. Lynch detailed process improvements that enable more frequent innovation without harming throughput, referencing new ingredient sourcing and equipment investments. Peter Saleh (BTIG): Asked about margin resilience and accelerated unit growth despite macro headwinds. Management highlighted best-ever labor attainment and waste reduction, and noted that construction and build costs are trending below forecast even with tariff concerns. Looking ahead, the StockStory team will monitor (1) whether operational initiatives—especially in labor and supply chain management—continue to expand margins, (2) the effectiveness of frequent menu innovation and targeted marketing in reigniting traffic growth, and (3) the success of new unit openings in diversifying sales away from weather-impacted core markets. Execution in drive-thru formats and digital guest engagement will also be key signposts. Shake Shack currently trades at a forward P/E ratio of 87.4×. Should you double down or take your chips? See for yourself in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
Business Insider
02-05-2025
- Business
- Business Insider
Wall Street Analysts Are Neutral on Top Consumer Cyclical Picks
Analysts fell to the sidelines weighing in on Shake Shack (SHAK – Research Report) and McDonald's (MCD – Research Report) with neutral ratings, indicating that the experts are neither bullish nor bearish on the stocks. Protect Your Portfolio Against Market Uncertainty Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter. Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox. Shake Shack (SHAK) In a report released today, Chris O`Cull from Stifel Nicolaus maintained a Hold rating on Shake Shack, with a price target of $97.00. The company's shares closed last Thursday at $88.71. According to O`Cull is a 5-star analyst with an average return of 13.2% and a 56.4% success rate. O`Cull covers the NA sector, focusing on stocks such as Restaurant Brands International, First Watch Restaurant Group, and Papa John's International. The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Shake Shack with a $111.13 average price target, a 18.8% upside from current levels. In a report issued on April 21, Bank of America Securities also maintained a Hold rating on the stock with a $89.00 price target. McDonald's (MCD) TD Cowen analyst Andrew Charles maintained a Hold rating on McDonald's today and set a price target of $305.00. The company's shares closed last Thursday at $313.64, close to its 52-week high of $326.32. According to Charles is a 5-star analyst with an average return of 8.6% and a 53.7% success rate. Charles covers the NA sector, focusing on stocks such as Restaurant Brands International, First Watch Restaurant Group, and Darden Restaurants. The word on The Street in general, suggests a Moderate Buy analyst consensus rating for McDonald's with a $326.62 average price target, which is a 4.3% upside from current levels. In a report issued on April 21, Bank of America Securities also maintained a Hold rating on the stock with a $312.00 price target.
Yahoo
01-05-2025
- Business
- Yahoo
Shake Shack: Q1 Earnings Snapshot
NEW YORK (AP) — NEW YORK (AP) — Shake Shack Inc. (SHAK) on Thursday reported first-quarter earnings of $4.2 million. On a per-share basis, the New York-based company said it had net income of 10 cents. Earnings, adjusted for one-time gains and costs, were 14 cents per share. The results did not meet Wall Street expectations. The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of 16 cents per share. The burger chain posted revenue of $320.9 million in the period, which also missed Street forecasts. Thirteen analysts surveyed by Zacks expected $327.8 million. _____ This story was generated by Automated Insights ( using data from Zacks Investment Research. Access a Zacks stock report on SHAK at
Yahoo
01-04-2025
- Business
- Yahoo
Shake Shack (SHAK): Buy, Sell, or Hold Post Q4 Earnings?
Over the past six months, Shake Shack's shares (currently trading at $88.30) have posted a disappointing 13.2% loss while the S&P 500 was down 1.6%. This might have investors contemplating their next move. Is now the time to buy Shake Shack, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it's free. Despite the more favorable entry price, we're sitting this one out for now. Here are three reasons why there are better opportunities than SHAK and a stock we'd rather own. Started as a hot dog cart in New York City's Madison Square Park, Shake Shack (NYSE:SHAK) is a fast-food restaurant known for its burgers and milkshakes. Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. Shake Shack was roughly breakeven when averaging the last two years of quarterly operating profits, inadequate for a restaurant business. This result is surprising given its high gross margin as a starting point. If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. Shake Shack broke even from a free cash flow perspective over the last two years, giving the company limited opportunities to return capital to shareholders. Growth gives us insight into a company's long-term potential, but how capital-efficient was that growth? A company's ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity). Shake Shack's five-year average ROIC was negative 2.9%, meaning management lost money while trying to expand the business. Its returns were among the worst in the restaurant sector. Shake Shack isn't a terrible business, but it doesn't pass our bar. Following the recent decline, the stock trades at 70.8× forward price-to-earnings (or $88.30 per share). This valuation tells us it's a bit of a market darling with a lot of good news priced in - you can find better investment opportunities elsewhere. Let us point you toward an all-weather company that owns household favorite Taco Bell. The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we're here to help you pick them. Get started by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
