A few weeks back Shake Shack stock reached an all-time high since it went public last January and it was announced the company was worth more than fast food giants Wendy's and Papa John's - now, as its growth decreases, stock prices are dropping for New York City's landmark burger chain.
Last Monday, Shake Shack stock dropped dramatically at 5.5 percent to reach $51.99 per stock as it goes through an important drop after months of soaring prices, finally stabilizing itself - and prompting analysts to be more careful of the many Chipotle Mexican Grill comparisons.
According to ETF Daily News, Shake Shack stock has been particularly volatile in the past few days after Cowen Group Inc. started covering the company late last week, on Friday, giving it a "market perform" rating, similar to neutral, with a price target of $42 a share, so there's a strong chance SHAK will continue to drop.
Money Morning predicted the Shake Shack stock drop months ago, back in May, stating that it would happen because the company's stock price rise has come merely from conjecture as a hot new thing instead of leaning of facts regarding the company's growth.
"Shake Shack remains a highly speculative company at best, and not the investment millions of people think it is," said the site's Chief Investment Strategist Keith Fitz-Gerald speaking of Shake Shack stock prices.
According to Benzinga, another analyst explaining the drop on the fast casual company's stock is CNN Money Digital Correspondent Paul La Monica, who says the chain remains overvalued for what it's truly worth.
In a similar note, La Monica also stated that, while it's easy to compare Shake Shack to the Wall Street phenomenon that is Chipotle, in fact they're fairly different cases, as Chipotle was the first of its kind whereas Shake Shack stock has to compete with other gourmet burger such as Five Guys.
