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Shake Shack, Inc. (SHAK) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Shake Shack (SHAK - Free Report) ? Shares have been on the move with the stock up 33.1% over the past month. The stock hit a new 52-week high of $100.71 in the previous session. Shake Shack has gained 32.3% since the start of the year compared to the 7.7% move for the Zacks Retail-Wholesale sector and the 3.5% return for the Zacks Retail - Restaurants industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 15, 2024, Shake Shack reported EPS of $0.02 versus consensus estimate of $0 while it beat the consensus revenue estimate by 2.3%.
For the current fiscal year, Shake Shack is expected to post earnings of $0.67 per share on $1.24 billion in revenues. This represents an 81.08% change in EPS on a 14.36% change in revenues. For the next fiscal year, the company is expected to earn $0.92 per share on $1.44 billion in revenues. This represents a year-over-year change of 37.3% and 15.52%, respectively.
Valuation Metrics
Shake Shack may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Shake Shack has a Value Score of F. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 145.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 21X. On a trailing cash flow basis, the stock currently trades at 37.6X versus its peer group's average of 11.3X. Additionally, the stock has a PEG ratio of 3.89. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Shake Shack currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Shake Shack meets the list of requirements. Thus, it seems as though Shake Shack shares could have a bit more room to run in the near term.
How Does SHAK Stack Up to the Competition?
Shares of SHAK have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Carrols Restaurant Group, Inc. (TAST - Free Report) . TAST has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. Carrols Restaurant Group, Inc. beat our consensus estimate by 128.57%, and for the current fiscal year, TAST is expected to post earnings of $0.62 per share on revenue of $1.88 billion.
Shares of Carrols Restaurant Group, Inc. have gained 0.5% over the past month, and currently trade at a forward P/E of 15.35X and a P/CF of 11.27X.
The Retail - Restaurants industry is in the top 41% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SHAK and TAST, even beyond their own solid fundamental situation.
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Shake Shack, Inc. (SHAK) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Shake Shack (SHAK - Free Report) ? Shares have been on the move with the stock up 33.1% over the past month. The stock hit a new 52-week high of $100.71 in the previous session. Shake Shack has gained 32.3% since the start of the year compared to the 7.7% move for the Zacks Retail-Wholesale sector and the 3.5% return for the Zacks Retail - Restaurants industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 15, 2024, Shake Shack reported EPS of $0.02 versus consensus estimate of $0 while it beat the consensus revenue estimate by 2.3%.
For the current fiscal year, Shake Shack is expected to post earnings of $0.67 per share on $1.24 billion in revenues. This represents an 81.08% change in EPS on a 14.36% change in revenues. For the next fiscal year, the company is expected to earn $0.92 per share on $1.44 billion in revenues. This represents a year-over-year change of 37.3% and 15.52%, respectively.
Valuation Metrics
Shake Shack may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Shake Shack has a Value Score of F. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 145.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 21X. On a trailing cash flow basis, the stock currently trades at 37.6X versus its peer group's average of 11.3X. Additionally, the stock has a PEG ratio of 3.89. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Shake Shack currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Shake Shack meets the list of requirements. Thus, it seems as though Shake Shack shares could have a bit more room to run in the near term.
How Does SHAK Stack Up to the Competition?
Shares of SHAK have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Carrols Restaurant Group, Inc. (TAST - Free Report) . TAST has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. Carrols Restaurant Group, Inc. beat our consensus estimate by 128.57%, and for the current fiscal year, TAST is expected to post earnings of $0.62 per share on revenue of $1.88 billion.
Shares of Carrols Restaurant Group, Inc. have gained 0.5% over the past month, and currently trade at a forward P/E of 15.35X and a P/CF of 11.27X.
The Retail - Restaurants industry is in the top 41% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SHAK and TAST, even beyond their own solid fundamental situation.