IB Net Payout Yields Model

Shake Shack: Still Not Reasonably Priced After 50% Decline

  • Shake Shack continues to sell off following the absurd valuations achieved shortly after the IPO.
  • The stock still trades at expensive multiples compared to other high-valued stocks in the sector without offering the faster growth.
  • Shake Shack doesn't yet offer a compelling valuation proposition, even after the nearly 50% decline from the peak.
It is hard to explain why the market does it, but over and over great companies get valued at absurd valuations. The scenario is now playing out with Shake Shack (NYSE:SHAK). The ultra-hot burger joint saw the stock initially trade after the IPO in the $40 range and surge to over $95 within months.

Read the full article on Seeking Alpha.

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