Is Shake Shack, Inc. overvalued or undervalued?

As of 7 July 2025, Shake Shack, Inc. has moved from an expensive to a very expensive valuation grade. The company is overvalued, with a P/E ratio of 420, a Price to Book Value of 11.65, and an EV to EBIT of 98.80. In comparison, peers such as Texas Roadhouse, Inc. and Aramark have P/E ratios of 24.79 and 31.90, respectively, highlighting the significant premium at which Shake Shack is trading.
Recent stock performance shows that Shake Shack has underperformed against the S&P 500, with a year-to-date return of -23.74% compared to the S&P 500's 12.22%. This trend reinforces the notion that the stock is overvalued given its high valuation ratios relative to its peers and the broader market performance.