Should You Invest in Shake Shack?

PHOTO CREDIT: Shake Shack

OVERVIEW

Why You Should?

  1. Shake Shack has extremely strong brand recognition in the markets that it operates in. The company is known to serve delicious burgers and shakes to customers since its founding. The company has leveraged this strong brand in order to open up new locations and enter new markets around the world. This has also benefited investors in the company.
  2. Shake Shack has been aggressively expanding internationally. The company is starting to build up a presence in countries like Singapore, the UK, Saudi Arabia, and many others all have Shake Shack locations. If this international growth continues, the company can see some promising results in the future. This will also benefit investors.
  3. Unlike competitors like McDonald’s, Shake Shack still has many untapped markets domestically and internationally. Most of the company’s operations are on the East Coast, but the company has been expanding in states on the west coast and much of the midwest. These untapped markets will benefit the company and its investors.

Why You Should Not?

  1. Continued labor shortages might hurt the company’s ability to staff current and new locations. Drops in efficiency and productivity might also happen due to these shortages in workers. If this shortage continues, it might hurt the company’s results in the short to mid-term.
  2. New York City recently announced vaccine mandates for anyone who wants to go indoors and eat at restaurants (among other things). Now, I 100% support vaccines and it is the only way to end the pandemic. However, vaccine mandates might hurt demand at some of the company’s restaurants as you are shutting out hundreds of thousands of customers.

MY OPINION

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.