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Strength Seen in Shake Shack (SHAK): Can Its 6.3% Jump Turn into More Strength?

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Shake Shack (SHAK - Free Report) shares soared 6.3% in the last trading session to close at $51.09. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.4% loss over the past four weeks.

Shares of Shake Shack appreciated after the company reported robust preliminary sales for the fourth quarter of fiscal 2022. Total revenues in fourth-quarter fiscal 2022 rose 17.3% year over year to $238.5 million. Moreover, Shack sales jumped 17.4% year over year to $229.9 million in the quarter under review.  Same-Shack sales rose 5.1% year over year in the fiscal fourth quarter.

This burger chain is expected to post quarterly loss of $0.17 per share in its upcoming report, which represents a year-over-year change of -54.6%. Revenues are expected to be $237.96 million, up 17.1% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Shake Shack, the consensus EPS estimate for the quarter has been revised 7.8% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on SHAK going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Shake Shack is a member of the Zacks Retail - Restaurants industry. One other stock in the same industry, Chuy's Holdings (CHUY - Free Report) , finished the last trading session 4.1% higher at $32.25. CHUY has returned 3.2% over the past month.

Chuy's' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.20. Compared to the company's year-ago EPS, this represents a change of -50%. Chuy's currently boasts a Zacks Rank of #3 (Hold).


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