Analyzing Shake Shack (SHAK) & Its Peers

Shake Shack (NYSE:SHAK) is one of 382 public companies in the “Hotels, Restaurants & Leisure” industry, but how does it contrast to its peers? We will compare Shake Shack to similar businesses based on the strength of its risk, profitability, earnings, analyst recommendations, institutional ownership, dividends and valuation.

Earnings and Valuation

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Shake Shack	$1.45 billion	$45.72 million	75.43
Shake Shack Competitors	$3.72 billion	$250.18 million	-156.49

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

Volatility & Risk

Shake Shack has a beta of 1.75, meaning that its stock price is 75% more volatile than the S&P 500. Comparatively, Shake Shack’s peers have a beta of 1.44, meaning that their average stock price is 44% more volatile than the S&P 500.

Insider and Institutional Ownership

86.1% of Shake Shack shares are owned by institutional investors. Comparatively, 48.7% of shares of all “Hotels, Restaurants & Leisure” companies are owned by institutional investors. 8.3% of Shake Shack shares are owned by company insiders. Comparatively, 22.1% of shares of all “Hotels, Restaurants & Leisure” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Shake Shack	2.72%	9.38%	2.75%
Shake Shack Competitors	8.52%	-40.63%	2.09%

Analyst Recommendations

This is a breakdown of recent ratings for Shake Shack and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shake Shack	0	12	16	0	2.57
Shake Shack Competitors	3807	17293	25614	906	2.50

Shake Shack presently has a consensus price target of $87.00, indicating a potential upside of 11.98%. As a group, “Hotels, Restaurants & Leisure” companies have a potential upside of 58.85%. Given Shake Shack’s peers higher probable upside, analysts clearly believe Shake Shack has less favorable growth aspects than its peers.

Summary

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

About Shake Shack

Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. The company was founded in 2001 and is headquartered in New York, New York.