Daniel Meyer, a director and significant shareholder of Shake Shack Inc . (NYSE:SHAK), recently sold shares of the company's Class A Common Stock. The transactions, executed on November 6, 2024, involved the sale of a total of 27,209 shares, yielding approximately $3.58 million. The sales were conducted at prices ranging from $130.86 to $132.44 per share.
The shares were sold through the Daniel H. Meyer Investment Trust, under a Rule 10b5-1 trading plan established earlier this year. Following these transactions, the trust retains ownership of 380,437 shares. Meyer, who is the grantor, trustee, and beneficiary of the trust, has stated that he disclaims beneficial ownership of the shares except as to his pecuniary interest.
In other recent news, Shake Shack has been the focus of several financial firms following robust Q3 results and increased revenue projections. Stifel revised its price target for Shake Shack to $115, maintaining a hold rating, while TD Cowen lifted its target to $140, maintaining a buy rating. This comes after Shake Shack reported a 14.7% YoY increase in total revenue, reaching $316.9 million, and an adjusted EBITDA rise of 28%, reaching $45.8 million.
Baird also increased its price target for Shake Shack to $122, maintaining a neutral rating, while Deutsche Bank (ETR:DBKGn) kept a hold rating but increased the price target to $133. Truist Securities raised its price target to $144, based on strong same-store sales and adjusted EBITDA.
Shake Shack also demonstrated strong expansion plans, opening 17 new locations and contributing to an overall total of over 550 Shacks. The company projects total revenue for Q4 2024 to be between $322.6 million and $327 million, and full-year 2024 revenue is expected to reach approximately $1.25 billion. Adjusted EBITDA for the full year is projected to grow 27% to 29%, reaching between $168 million and $170 million. These are all recent developments that investors should take note of.
InvestingPro Insights
As Daniel Meyer's recent sale of Shake Shack shares makes waves, InvestingPro data offers additional context to this significant transaction. The company's market capitalization stands at $5.59 billion, reflecting its substantial presence in the fast-casual dining sector. Shake Shack's impressive revenue of $1.21 billion for the last twelve months as of Q3 2023, coupled with a robust revenue growth of 16.38% over the same period, underscores the company's continued expansion and market appeal.
Interestingly, an InvestingPro Tip reveals that 12 analysts have revised their earnings upwards for the upcoming period, suggesting a positive outlook on the company's financial performance. This optimism aligns with the stock's strong performance, as evidenced by its 134.38% price return over the past year.
However, investors should note another InvestingPro Tip indicating that the stock is trading at a high earnings multiple. With a P/E ratio of 596.45 and an adjusted P/E ratio of 129.91 for the last twelve months as of Q3 2023, Shake Shack's valuation appears stretched compared to industry averages. This high valuation multiple could provide context for Meyer's decision to sell a portion of his holdings.
For those seeking a deeper understanding of Shake Shack's financial landscape, InvestingPro offers 16 additional tips that could provide valuable insights for investment decisions.
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