Skip to main content

Shake Shack Inc (SHAK) Could Double Earnings in 5 Years

By U.S. News & World Report

Shake Shack Inc (ticker: SHAK) shares got a bit of a bump on Wednesday after Piper Jaffray initiated coverage of the stock with an “outperform” rating and said the company should continue to grow its revenue by at least 20 percent annually for the foreseeable future. In the new research note, analyst Nicole Regan says Shake Shack’s culture, hospitality and growth make it a unique investment opportunity in the restaurant space.

“We view a steadfast commitment to developing, maintaining and transporting this culture as one of the most important factors in determining the company’s ability to replicate its industry-leading sales, profitability and unit growth on a go-forward basis,” Regan says.

She also sets a $44 price target for Shake Shack’s stock. The target price represents an enterprise value/EBITDA multiple of 24 based on Piper Jaffray’s fiscal 2018 earnings projections.

[See: 9 Food-Focused ETFs to Feed Your Portfolio.]

Regan projects that SHAK will maintain at least 20 percent annual revenue growth in the long term as it expands its number of locations. The combination of unit growth and positive same-store sales growth should allow Shake Shack to double its earnings within the next five years, Regan says.

“The company’s portfolio of domestic, company-owned restaurant locations (at approximately 71 currently and growing) is likely to remain the principal focus for the foreseeable future given the company’s belief in the long-term unit potential for approximately 450 stores domestically,” Regan says.

As of the first quarter, there were 152 Shake Shack locations. Roughly half (52 percent) are domestic, company-owned locations, 42 percent are international licensed locations and the remainder are domestic licensed locations.

While the company focuses on company-owned, domestic restaurants, adding licensed locations is a compelling high-margin, low-expense growth opportunity as well, Regan says.

[See: 8 Stocks to Profit From America’s Love of Burgers.]

The restaurant business is in a valuation contraction cycle, but Piper Jaffray says Shake Shack will maintain its premium market valuation relative to peers as it positions itself for the next expansion cycle. Shake Shack stock is up 5.4 percent so far in 2017.

More from U.S. News

10 Tips for Keeping a Cool Head in a Market Meltdown

6 Things to Know About Mark Zuckerberg’s Manifesto

10 Ways to Invest in Driverless Cars

Shake Shack Inc (SHAK) Could Double Earnings in 5 Years originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
Read Next Story

Related News

Frustration grows in Venezuela as earthquake death toll reaches 1,430

Israel and Lebanon sign framework agreement with US in ‘first step’ toward peace, Rubio says

Trump-endorsed populist poised to become Colombia’s next president as rival challenges vote