Shake Shack (NYSE: SHAK) is one of 44 publicly-traded companies in the “Restaurants & Bars” industry, but how does it contrast to its competitors? We will compare Shake Shack to similar companies based on the strength of its risk, institutional ownership, earnings, valuation, profitability, dividends and analyst recommendations.

Institutional & Insider Ownership

82.3% of Shake Shack shares are held by institutional investors. Comparatively, 69.0% of shares of all “Restaurants & Bars” companies are held by institutional investors. 34.9% of Shake Shack shares are held by insiders. Comparatively, 20.6% of shares of all “Restaurants & Bars” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Shake Shack and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shake Shack 1 6 4 0 2.27
Shake Shack Competitors 272 1546 2139 73 2.50

Shake Shack presently has a consensus target price of $36.73, indicating a potential upside of 11.91%. As a group, “Restaurants & Bars” companies have a potential upside of 10.66%. Given Shake Shack’s higher probable upside, equities analysts plainly believe Shake Shack is more favorable than its competitors.

Profitability

This table compares Shake Shack and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shake Shack 4.70% 8.71% 3.29%
Shake Shack Competitors 1.77% 12.56% 1.79%

Valuation & Earnings

This table compares Shake Shack and its competitors top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Shake Shack $315.90 million $49.67 million 56.59
Shake Shack Competitors $2.04 billion $349.09 million -3.87

Shake Shack’s competitors have higher revenue and earnings than Shake Shack. Shake Shack is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Risk and Volatility

Shake Shack has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500. Comparatively, Shake Shack’s competitors have a beta of 0.67, indicating that their average stock price is 33% less volatile than the S&P 500.

Summary

Shake Shack beats its competitors on 7 of the 13 factors compared.

About Shake Shack

Shake Shack Inc. operates roadside burger stands. The Company serves an American menu of burgers, hot dogs, crispy chicken, frozen custard, crinkle cut fries, shakes, beer and wine, among others. The Company’s signature items are its all-natural, hormone and antibiotic-free burgers, hot dogs, crispy chicken, crinkle cut fries, shakes and frozen custard. Its menu focuses on food and beverages, crafted from a range of classic American foods. The Company’s domestic menu includes a range of signature items, such as the ShackBurger, SmokeShack, Shack-cago Dog, ‘Shroom Burger, seasonal frozen custard, hand-spun shakes, concretes, ShackMeister Ale, and Shack Red and Shack White wines. As of December 28, 2016, it had 114 Shacks in 13 countries and 16 states, as well as the District of Columbia. Its burgers are made with a whole-muscle blend of all-natural, hormone and antibiotic-free Angus beef, ground fresh daily, cooked to order and served on a non-genetically modified organism potato bun.

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