Investment Thesis
Shake Shack demonstrates solid revenue growth of 15.4% YoY, but the company remains unprofitable with negative operating income of -2.6M and alarming negative free cash flow of -38.7M. The business cannot generate sufficient operating income to cover its interest obligations (-4.8x coverage ratio), indicating fundamental unit economics problems that threaten financial sustainability.
Strengths
- Revenue growth of 15.4% YoY demonstrates continued customer demand
- Strong liquidity position with 1.69x current ratio and 313.6M cash reserves
- Moderate leverage with 0.47x debt-to-equity ratio provides financial flexibility
Risks
- Unprofitable operations with negative operating income and net income despite revenue growth
- Negative free cash flow of -38.7M indicates the company is burning cash on a GAAP basis
- Negative interest coverage of -4.8x means operating income cannot service debt, creating refinancing risk
- Structural profitability challenges with negative operating margin of -0.7% indicating cost structure misalignment
Key Metrics to Watch
- Path to positive operating income and operating margin expansion
- Free cash flow inflection point and capital efficiency improvements
- Same-store sales growth and unit-level profitability trends
Financial Metrics
Revenue
366.7M
Net Income
-290.0K
EPS (Diluted)
$-0.01
Free Cash Flow
-38.7M
Total Assets
1.9B
Cash
313.7M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-0.7%
Net Margin
-0.1%
ROE
-0.1%
ROA
0.0%
FCF Margin
-10.6%
Balance Sheet & Liquidity
Current Ratio
1.69x
Quick Ratio
1.66x
Debt/Equity
0.47x
Debt/Assets
71.1%
Interest Coverage
-4.81x
Long-term Debt
248.0M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-09T13:06:20.474286 |
Data as of: 2026-04-01 |
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