Shake Shack’s performance has been stunning.
The casual fast food chain closed up 3.3% at $US92.86 per share on Friday. That was the sixth straight day of gains, and the longest such streak since its January 30 public market debut.
This month, shares of the burger chain are up 35%, and the company has a market cap of $US3.2 billion.
In the first quarter, the company’s earnings crushed expectations.
Revenue rose 56.3% from the previous year to $US37.8 million, while earnings per share doubled from the year-ago period.
In a note after the earnings, Stifel analysts said the quarter was “a historically impressive ‘beat and raise.'” That phrase is analyst-speak for a quarter in which a company beats forecasts, and provides an outlook that is also above expectations.
In that note, the analysts said Shake Shack has the industry’s “best company/concept story.” Separately, CNBC’s Jim Cramer called the company a “Tesla for burgers.”
Probably most impressive in the quarter was the growth in same-store sales, or ‘same-Shack sales,’ as the company calls them, which jumped 11.7%, versus Wall Street’s expectations for a 5.1% increase. And the stock has taken off.
But has it gone too far? This week, we got a reminder of what one Shack is worth. It is a lot.
Here’s the chart that compares the chain to its big competitors, posted on StockTwits.
Also this week, we learned that Shake Shack could be testing a chicken sandwich.
According to a CNBC report, a unit of the company called SSE IP filed an application to trademark the name “Chicken Shack.” Shake Shack didn’t confirm this specifically, only saying that it tests new products all the time.
The company expects to open 10 new local company-operated Shacks this year, and at least five international licensed restaurants in the UK and Middle East. It re-opened the flagship Madison Square Park Shack on Wednesday.
This fast growth brings one big challenge: Shake Shack is expanding in a market that’s already saturated.
As Business Insider’s Ashley Lutz wrote, Five Guys and Smashburger are just two of the many gourmet burger joints across the country. And Shake Shack is still relatively new and small.
There’s also rising beef costs to worry about, as Jeffries analysts noted in recent comments on the company.
But so far, investors can’t get enough of the burger chain. And maybe for good reason: investors who bought shares at the IPO price of $US21 have seen their stakes more than quadruple.