Shake Shack’s Stock Surpasses Analyst Targets: Time for Investors to Re-evaluate?
In recent trading, shares of Shake Shack Inc (Symbol: SHAK) have crossed above the average analyst 12-month target price of $116.45, changing hands for $122.47/share. When a stock reaches the target set by an analyst, there are typically two possible reactions: a downgrade due to valuation concerns or an adjustment of the target price upwards. Analysts may also consider recent business developments that could have positively impacted the stock price — if conditions are improving for the company, raising the target price may be warranted.
Shake Shack has 20 different analyst targets within the Zacks coverage universe contributing to that average. However, this average represents a mathematical midpoint among varying predictions. Some analysts have lower expectations, with one setting a price target of $95.00, while the highest target stands at $135.00. The standard deviation of these targets is $10.898.
The reasoning behind examining the average price target for SHAK lies in leveraging a “wisdom of crowds” approach. This combines insights from multiple analysts rather than relying on the view of a single expert. With SHAK moving above the average target price of $116.45/share, investors are encouraged to take a moment to assess the company. They must determine whether $116.45 is just a pause before potentially reaching an even higher target, or if the valuation has become too inflated, suggesting it might be wise to consider taking some profits. Below is a table detailing the current opinions of analysts covering Shake Shack Inc:
| Recent SHAK Analyst Ratings Breakdown | ||||
|---|---|---|---|---|
| » | Current | 1 Month Ago | 2 Months Ago | 3 Months Ago |
| Strong buy ratings: | 9 | 9 | 9 | 10 |
| Buy ratings: | 0 | 0 | 0 | 0 |
| Hold ratings: | 11 | 11 | 11 | 10 |
| Sell ratings: | 0 | 0 | 0 | 0 |
| Strong sell ratings: | 1 | 1 | 1 | 1 |
| Average rating: | 2.24 | 2.24 | 2.24 | 2.14 |
The average rating provided in the last row of the table ranges from 1 to 5, with 1 being Strong Buy and 5 being Strong Sell. This analysis utilizes data from Zacks Investment Research via Quandl.com. For more insights, readers can access the latest Zacks research report on SHAK — available for free.
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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
