As of June 16, 2025, Shake Shack Inc has a Discounted Cash Flow (DCF) derived fair value of $153.12 per share. With the current market price at $123.71, this represents a potential upside of 23.8%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $78.59 |
| DCF Fair Value (10-year) | $153.12 |
| Potential Upside (5-year) | -36.5% |
| Potential Upside (10-year) | 23.8% |
| Discount Rate (WACC) | 6.0% - 7.9% |
Revenue is projected to grow from $1253 million in 12-2024 to $3411 million by 12-2034, representing a compound annual growth rate of approximately 10.5%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 1253 | 15% |
| 12-2025 | 1384 | 10% |
| 12-2026 | 1543 | 11% |
| 12-2027 | 1682 | 9% |
| 12-2028 | 1877 | 12% |
| 12-2029 | 2079 | 11% |
| 12-2030 | 2330 | 12% |
| 12-2031 | 2592 | 11% |
| 12-2032 | 2841 | 10% |
| 12-2033 | 3109 | 9% |
| 12-2034 | 3411 | 10% |
Net profit margin is expected to improve from 1% in 12-2024 to 12% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 11 | 1% |
| 12-2025 | 41 | 3% |
| 12-2026 | 76 | 5% |
| 12-2027 | 114 | 7% |
| 12-2028 | 160 | 9% |
| 12-2029 | 212 | 10% |
| 12-2030 | 245 | 11% |
| 12-2031 | 281 | 11% |
| 12-2032 | 317 | 11% |
| 12-2033 | 357 | 11% |
| 12-2034 | 402 | 12% |
with a 5-year average of $119 million. Projected CapEx is expected to maintain at approximately 13% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 142 |
| 12-2026 | 163 |
| 12-2027 | 180 |
| 12-2028 | 201 |
| 12-2029 | 230 |
| 12-2030 | 255 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 2 |
| Days Inventory | 3 |
| Days Payables | 13 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 148 | 9 | 139 | 3 | (4) |
| 2026 | 264 | 23 | 207 | 3 | 31 |
| 2027 | 331 | 35 | 225 | (5) | 74 |
| 2028 | 413 | 49 | 252 | 2 | 110 |
| 2029 | 510 | 66 | 279 | 0 | 165 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 78.59 | -36.5% |
| 10-Year DCF (Growth) | 153.12 | 23.8% |
| 5-Year DCF (EBITDA) | 61.26 | -50.5% |
| 10-Year DCF (EBITDA) | 101.13 | -18.3% |
Is Shake Shack Inc (SHAK) a buy or a sell? Shake Shack Inc is definitely a buy. Based on our DCF analysis, Shake Shack Inc (SHAK) appears to be moderately undervalued with upside potential of 23.8%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a buy at the current market price of $123.71.