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Valuations Just Cannot Support Shake Shack Shares
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After the markets closed on Monday, Shake Shack Inc. (NYSE: SHAK) released its fourth-quarter earnings report, and analysts and investors alike did not enjoy the results. The stock sold off about 10% early in Tuesday’s session, and one key analyst cut its ratings despite relatively decent earnings.
The company had $0.08 in earnings per share (EPS) on $51 million in revenue, compared to the consensus estimates from Thomson Reuters that called for $0.07 in EPS on $50.44 million in revenue. In the same period from the previous year, the company posted a net loss of $0.01 per share on $34.77 million in revenue.
Total revenue increased about 47% in the fourth quarter, and was composed of shack sales increasing 49% to $49.3 million, with the remainder of the revenue made up in licensing. Same-store sales increased by 11% in the quarter as well, compared to the 7.2% from last year.
In terms of guidance for the 2016 full year, the company expects revenue to be in the range of $237 million to $242 million and same-store sales growth to be in the range of $2.5% to 3.0%. Consensus estimates call for $0.39 in EPS on $240.72 million in revenue.
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