SHAK
Shake Shack Inc.
$62.72
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 33.4% below fair value
You pay
$62.72
Bear
$41.67
Fair
$94.14
Bull
$163.55
Bear
$41.67
-33.6%
14% stage 1 growth, 12% discount
Fair
$94.14
+50.1%
23% stage 1 growth, 12% discount
Bull
$163.55
+160.8%
29% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (23% base case)
Terminal Value % of EV
44%
Implied Market Multiple
34.9x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $104.60 from 37 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $94.14 per share.
Warnings
Stock-based employee pay equals 43% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions