Shake Shack Inc. (SHAK) Stock | Shake Down On Q3 Results

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Shake Shack Inc.  (NASDAQ: SHAK)

 

Shake Shack Inc. (SHAK), a restaurant company on Thursday announced positive third quarter 2015 financial results. Total revenue was $53.3 million which increased 67.4% from third quarter 2014. Adjusted EBITDA was $13 million which increased 128.3% from third quarter 2014.

 

Shake Shack Inc. CEO Comments

Randy Garutti, Chief Executive Officer of Shake Shack, stated,

“The third quarter marked another strong quarter in terms of same-Shack sales growth, as we continued to execute on our strategic plan and drive engagement with our guests. We opened four domestic company-operated Shacks during the quarter and, as previously announced, we will be officially opening our first Shack in Tokyo in the remarkable Meiji-Jingu Gaien park this November, ahead of schedule. 2015 has been an exceptional year for us and, with the opening of two additional domestic company-operated Shacks subsequent to the quarter, we have delivered on our target to open 12 new domestic company-operated Shacks for 2015. Looking ahead, we now expect to open at least 14 domestic company-operated Shacks next year and beyond. We remain well positioned for continued success as we capitalize on our unique development opportunities.”  Business Wire

SHAK Technical Analysis

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SHAK gapped up in price Friday to $53, up from the prior day’s close of $51.11, which is a 4% increase on the favorable news. Taking a look at the daily chart, we can see the last time SHAK traded above this price level was on September 18th when it closed at $53.16. Taking a further look back on the chart we can see SHAK has been in an overall decline dating back to August 7th when it traded at $71.64. More recently, SHAK has been bouncing off lows of $44.32 from October 29th. The next significant resistance level could be $55 which was reached on September 11th. SHAK has a low float of 3.82 million shares and wass trading over 1.5 times the normal daily trading volume. Both of these factors make the stock a good candidate for the gap and go strategy. SHAK did reach pre market highs of $55.37, but gave back $2.37 at the open, or equivalent to 4%. For trading purposes, my entry point would have been $53.10 looking for a run through $54. My stop loss would have been $52.90, fearing anything below that and the stock would start to fill in the gap up.

 

Company Profile

Shake Shack Inc. (Shake Shack), incorporated on September 23, 2014, is a holding company with no direct operations and its principal asset is the equity interest in SSE Holdings, LLC (SSE Holdings). The Company holds 33.3% ownership interest in SSE Holdings. SSE Holdings operates and licenses restaurants in the global restaurant industry, serving hamburgers, hot dogs, crinkle-cut fries, shakes, frozen custard, beer and wine. As of December 31, 2014, the Company had 63 Shake Shack restaurants (Shacks) in nine countries and 34 cities.

The Company owns and operates Shacks in 10 states and the District of Columbia. As of December 31, 2014, the Company had 31 company-operated Shacks in operation in the United States. The Company also has license arrangements with affiliated and unaffiliated operators to develop and operate Shacks. As of December 31, 2014, 32 licensed Shacks were in operation under license agreements in North America, Europe and Asia.  Reuters

 

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