Shake Shack shares just hit a 7-month high ahead of earnings

Robby Keesb eats a Shake Shack burger in front of New York Stock Exchange as part of the company's IPO celebration January 30, 2015.

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Robby Keesb eats a Shake Shack burger in front of New York Stock Exchange as part of the company’s IPO celebration January 30, 2015.
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REUTERS/Brendan McDermid

  • Shake Shack is scheduled to report first-quarter earnings after the market’s close on Thursday.
  • Shares have soared 37% so far this year, and its valuation has become incredibly rich, trading at 103 times forward earnings.
  • Shares hit the highest level since October in Thursday trading.
  • Watch Shake Shack trade live.

Shake Shack is expected to report first-quarter earnings after the market’s close on Thursday, with shares jumping to a seven-month high ahead of the results. The stock hit $62.84 a share, matching the high it hit in early October.

Here’s what analysts surveyed by Bloomberg expect Shake Shack to report:

  • Revenue: $127.2 million
  • Adjusted earnings per share: $0.13
  • Adjusted net income: $4.9 million

While shares of the New York-based burger chain have soared 37% so far this year, its valuation has become incredibly rich, trading at nearly 103 times forward earnings.

Some analysts say this holds them back from recommending investors snap up the stock. JPMorgan analysts led by John Ivankoe told clients last month that their “underweight” rating was due to that pricey valuation.

“Shake Shack is a big brand with even bigger potential, but a small company,” they wrote. “We believe the company’s target for 450 company-operated units in the US will be handily exceeded and a 600-800+ goal is achievable.”

The analysts carry a $51 price target, implying a 19% drop from current levels.

Last quarter, Shake Shack said it expected comparable same-store sales growth of between 0% and 1% for fiscal year 2019. That forecast took into consideration about 1.5% of menu price increases put into effect last December.

Wall Street’s view on Shake Shack is overwhelmingly neutral. Of analysts polled by Bloomberg, seven say “hold,” three say “buy,” and one says “sell.”

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Shake Shack shares.

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Shake Shack shares.
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Markets Insider