Shake Shack Inc. : Good timing to go long again

11/02/2021 | 03:03am EDT

Tommy Douziech

long trade Target price hit

Entry price : 74.57$ | Target : 85.83$ | Stop-loss : 69.17$ | Potential : 15.1%

The recent downward movement has sent Shake Shack Inc. shares back to attractive levels situated around 69.17 USD. This zone could put an end to the downward movement and offers a good timing for new long positions. Investors have an opportunity to buy the stock and target the $ 85.83.

Summary

• From a short-term investment perspective, the company presents a deteriorated fundamental configuration.

Strengths

• The prospective high growth for the next fiscal years is among the main assets of the company
• The company is in a robust financial situation considering its net cash and margin position.
• The difference between current prices and the average target price is rather important and implies a significant appreciation potential for the stock.

Weaknesses

• As a percentage of sales and without taking into account depreciation and amortization, the company has relatively low margins.
• The company has insufficient levels of profitability.
• In relation to the value of its tangible assets, the company's valuation appears relatively high.
• For the last 12 months, analysts have been regularly downgrading their EPS expectations. Analysts predict worse results for the company against their predictions a year ago.
• For the last twelve months, the analysts covering the company have given a bearish overview of EPS estimates, resulting in frequent downward revisions.
• Over the past four months, analysts' average price target has been revised downwards significantly.
• Sales estimates for the next fiscal years vary from one analyst to another. This clearly highlights a lack of visibility into the company's future activity.
• The group usually releases earnings worse than estimated.

© MarketScreener.com 2021

Disclaimer: The information, charts, data, views, or comments provided by SURPERFORMANCE SAS are intended for investors who have the necessary knowledge and experience to understand and appreciate the information contained within. These items are disseminated for personal reference only. They do not constitute an offer or solicitation to buy or sell financial products or services, nor an investment advice.
The use of the information disseminated takes place under the investor's sole responsibility, without recourse against SURPERFORMANCE SAS. SURPERFORMANCE SAS will not be liable, whether in contract, in tort, under any warranty, for errors, omissions, improper investments, or adverse evolution of markets.