01 Jul The charts are showing this burger chain can soon blow through its all-time highs
I believe Shake Shack is on the attack for a continuation to and through all-time highs, possibly once and for all. I last wrote about SHAK in February of last year and first added this company to our growth portfolio on Feb. 2, 2024. It’s been a volatile ride since then, as the company navigates expansion in a competitive fast casual dining space, as well as a rich valuation that has some reluctant to chase into all-time highs. Looking at the weekly chart, first we see a third attempt since 2021 to break through the $140 region. Looking at the lower volume chart, we see a blue wall of volume mostly above the 50-week average volume (5.76 million shares per week) that screams institutional accumulation, despite the high valuation. Below that, we see consistent top-line revenue growth since 2021 ranging from 15% to 20%. Just above that, are the GAAP EPS figures that show a nasty decline in 2024 of 48.81%. Non-GAAP earnings, however, surged 148.6% year over year. The discrepancy was from the September 2024 earnings — where management listed several key “one-time” items. As we move to the daily chart, you can see discrepancy in Q3 2024 GAAP vs non-GAAP earnings at the bottom of the chart. Looking at the price bars on the far left of the chart, you’ll see the stock gapped up that day. Turning back to the hard right edge of the chart, we see a test of the key $140-zone happening again with Q3 earnings set to be reported in 30 days. Before then, I would not be surprised to see a pullback towards the former resistance-turned-support zone around $130 that can be used for entries. Looking at the yearly change in EPS, the rich valuation can be overlooked in this momentum stock for now: 2023: +219% 2024: +148% 2025 expected: +44.8% 2026 expected: 24.9% I would buy the stock and forget about it for a few years, rather see if the recent upgrades from Barclays and Oppenheimer can materialize. The company has aggressive expansion plans of 45-50 company-operated outlets in 2025 and with global licensing deals expected. The company has 570 locations worldwide, according to the company website. Shake Shack is emphasizing digital sales with approximately 38% of total transactions are done on the app with additional functionality expected. We hold SHAK in two of our portfolios at Inside Edge Capital. In our flagship growth portfolio (Tactical Alpha Growth), we hold a 2.5% position after increasing from 1% on the May 28th 2025 reallocation. In our faster money “Active Opps” account, we hold a 5.23% allocation. If we can sustain a break above the $140.00 resistance level, I will look to increase the holding size in both while trailing my risk management levels higher. -Todd Gordon, Founder of Inside Edge Capital, LLC We offer active portfolio management and regular subscriber updates like the idea presented above. DISCLOSURES: Gordon owns SHAK personally and in his wealth management company Inside Edge Capital. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.