Shake Shack

SHAK

Restaurants · Consumer Cyclical

Price

$58.00

-1.23 (-2.08%)

Market Cap

$2.34B

Winston Score

Winston is curious

Mixed quality — meaningful strengths and weaknesses.

Share count rising — dilution

+7.1% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 39.1M (2021) → 41.8M (2025)

Shake Shack is a fast-casual restaurant chain that sells burgers, chicken sandwiches, hot dogs, crinkle-cut fries, milkshakes, and lemonade. It started as a hot dog cart in New York City's Madison Square Park in 2001 and has grown into a recognizable brand with hundreds of locations. The company targets everyday consumers who want food that feels a step above typical fast food but is still quick and affordable.

Shake Shack makes money primarily by selling food and drinks directly to customers at its restaurants. It operates in the United States and internationally, with locations in markets like the Middle East, Asia, and Europe — some of which are run by licensed partners who pay fees to use the brand. With a gross margin under 20% and an ROIC below 3%, the business is not highly profitable today, and rising food and labor costs are a constant pressure. The key growth driver is expanding its restaurant count, but execution and cost control will determine whether that growth translates into meaningful profits.

Winston Score History

Politician Trades

4 trades / 12mo

2 Congressional buys and 2 sells on SHAK in the last 12 months.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+14.3% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

-106.5% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

4.7%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Runway

~5 years

$314M cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

$314M cash & investments at current burn rate

Growth context

Shake Shack is growing revenue at 14% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

47.4%

Healthy — 47.4% gross margin

Operating Margin

1.4%

Thin — 1.4% operating margin

ROCE

0.4%

Weak — 0.4% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+16.2%

Fast-growing sales (16.2% YoY)

EPS YoY

+229.9%

Earnings growing fast (229.9% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

537%

Turns 537% of profit into real cash

FCF Margin

2.5%

Thin free cash flow (2.5%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

1.75

Elevated debt (1.75)

Interest Cover

13.36x

Comfortably covers interest (13.4x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

56.7x

Expensive — P/E 56.7

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+27.3

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (56.7 → 29.4)

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Dividends

Not applicable for this business.

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