Shake Shack Inc. (SHAK): Here Are Some Research Recommendations

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Shake Shack Inc. (NYSE:SHAK) finished Friday with a subtraction of -$0.07 to close at $41.53, a downside of -0.17 percent. An average of 561,340 shares of common stock have been traded in the last five days. There was a fall of -$3.42 in the past week, and it reached a new high 3 times over the past 12 months. The last 20 days have seen an average of 633,055 shares traded, while the 50-day average volume stands at 760,136.

SHAK stock has decreased by -21.05% in the last month. The company shares reached their 1-month lowest point of $40.83 on 12/30/22. With the stock rallying to its 52-week high on 01/11/22, shares of the company touched a low of $37.72 and a high of $79.62 in 52 weeks. It has reached a new high 2 times so far this year and lost -42.45% or -$30.63 in price. In spite of this, the price is down -47.84% from the 52-week high.

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Insider Transactions

SHAK stock investors should be aware that Shake Shack Inc. (SHAK) stock had its last reported insider trading activity 64 days ago on Oct 28. In this transaction, the insider spent $214,500. Chief Operating Officer, Koff Zach, disposed of 5,000 shares at a price of $45.00 on Jul 14. The insider now owns more than $225,000 worth of shares.

Valuation Metrics

Shake Shack Inc. (SHAK) stock’s beta is 1.56. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 2.03, the price-to-book (PB) ratio at 4.04.

Financial Health

The quick ratio of Shake Shack Inc. for the three months ended September 29 was 2.50, and the current ratio was 2.50, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.61 and a total debt to equity ratio of 0.62 for the quarter ending September 29. Its gross profit as reported stood at $144.06 million compared to revenue of $739.89 million.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Shake Shack Inc.’s return on assets was -1.60%.

Earnings Surprise

For the three-month period that ended September 29, Shake Shack Inc. had $80.02 million in cash and short-term investments compared to $244.33 million in total debt. In the quarter under review, the net income was down than the previous quarter. The company posted a net income of -$2.02 million in the quarter, while revenues of -$1.19 million were shrunk -7.92%. The analyst consensus anticipated Shake Shack Inc.’s latest quarter earnings to come in at -$0.06 per share, but it turned out to be -$0.06, a 0.00% surprise. For the quarter, EBITDA amounted to $14.48 million. Shareholders own equity worth $42.15 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Shake Shack Inc. (SHAK) price momentum. RSI 9-day as of the close on 30 December was 19.48%, suggesting the stock is oversold, with historical volatility in this time frame at 20.90%.

As of today, SHAK’s price is $42.79 -7.61% or -$3.42 from its 5-day moving average. SHAK is currently trading -20.24% lower than its 20-day SMA and -15.40% lower than its 100-day SMA. However, the stock’s current price level is -16.40% below the SMA50 and -38.46% below the SMA200.

The stochastic %K and %D were 3.23% and 3.27%, respectively, and the average true range (ATR) was 1.80. With the 14-day stochastic at 6.35% and the average true range at 1.95, the RSI (14) stands at 28.45%. The stock has reached -2.28 on the 9-day MACD Oscillator while the 14-day reading was at -4.02.

Analyst Ratings

Wedbush downgraded Shake Shack Inc. (NYSE: SHAK) to a a Neutral rating in its most recent analyst report. Previously, the stock was rated as an Outperform. The consensus rating for Shake Shack Inc. (SHAK) among analysts is Hold. According to current brokerage recommendations, 1 brokerage firm advise that investors sell SHAK, while 14 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 0 analysts, while 6 others rate it as a “buy”.

What is SHAK’s price target for the next 12 months?

Analysts predict a range of price targets between $45.00 and $69.00, with a median target of $52.00. Taking a look at these predictions, the average price target given by analysts for Shake Shack Inc. (SHAK) stock is $53.72.

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