SHAK Attack

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SHAK Attack

Shake Shack ( NYSE: SHAK)

According to a Yahoo  Finance  report on SHAK earnings Wednesday afternoon, the 90 day old publicly traded burger chain reported an adjusted profit of $0.04 per share on revenue of $37.8 million. Revenue was up 56.3% from the same quarter last year while adjusted EPS doubled from a year ago.

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Same-store sales or as the company calls them, Same-Shack Sales were up 11.7% in the first quarter, above expectations.

The stock percolated up 5-6% Wednesday on anticipation of this news and erupted another 10% post market.  Only to GIVE IT ALL BACK in Thursday’s market to a close of $65.50 or -$4.18.

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This Stock is volatile or at the very least precarious, first because of its lack of maturity, its low float and no options availability as of yet, creating a sandbox for market makers to have at it.

So how does it stack up on the leaderboard?

Ticker Stock Price 51415 Close Rev $ Rev $ / Share Profit Margin Market CAP
SHAK 65.50 118.53M (adj 168M) 3.95 1.79% 2.36B
MCD 97.71 26.70B 27.43 16.35% 93.66B
CMG 634.53 4.29B 138.35 11.30% 19.70B
WEN 11.21 2.06B 5.57 5.89% 4.12B

 

A very auspicious beginning, but as you can see, it has a long way to go.

Low cost trades, higher leverage

Does SHAK Have a Chance?

From the start, this IPO wasn’t in the picture. SHAK was simply a hot dog stand, a really great hot dog stand focused on great food and product delivery; not focused on real estate acquisition, marketing and mass producing a consistent hamburger. This being at its core along with the current operators understanding that quality ingredients and a superb product as they grow market presence will be significant in contributing to success and perhaps these are the reasons according to Yahoo  Finance that analysts see this delicious chain to be similar to Chipotle’s (NYSE:CMD) or Panera’s (NASDAQ:PNRA).

Shake Shack sprouted from a hot dog cart in Madison Square Park in Manhattan to support the Madison Square Park Conservancy’s first art installation. The cart was quite the success, with Shack Fans lined up daily for three summers.

In 2004, the bid was won to open a permanent kiosk in the Park: Shake Shack was born. This modern day “roadside” burger stand serves up the most delicious burgers, hot dogs, frozen custard, shakes, beer, wine and more. An instant neighborhood fixture, Shake Shack welcomed people from all over the city, country and world who gathered together to enjoy fresh, simple, high-quality versions of the classics in a majestic setting. The rest, as they say, is burger history.

www.shakeshack.com  –  Yahoo  Finance

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