Wingstop (NASDAQ:WING – Get Free Report) and Shake Shack (NYSE:SHAK – Get Free Report) are both mid-cap retail/wholesale companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, dividends, earnings, valuation, profitability, risk and institutional ownership.
Volatility and Risk
Wingstop has a beta of 1.79, meaning that its stock price is 79% more volatile than the S&P 500. Comparatively, Shake Shack has a beta of 1.63, meaning that its stock price is 63% more volatile than the S&P 500.
Valuation and Earnings
This table compares Wingstop and Shake Shack”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Wingstop | $696.85 million | 5.27 | $174.27 million | $4.02 | 33.52 |
| Shake Shack | $1.45 billion | 1.87 | $45.72 million | $0.98 | 64.45 |
Wingstop has higher earnings, but lower revenue than Shake Shack. Wingstop is trading at a lower price-to-earnings ratio than Shake Shack, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
86.1% of Shake Shack shares are held by institutional investors. 0.5% of Wingstop shares are held by insiders. Comparatively, 8.3% of Shake Shack shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Profitability
This table compares Wingstop and Shake Shack’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Wingstop | 15.77% | -16.22% | 17.12% |
| Shake Shack | 2.76% | 9.62% | 2.81% |
Analyst Ratings
This is a breakdown of current ratings for Wingstop and Shake Shack, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Wingstop | 1 | 5 | 23 | 1 | 2.80 |
| Shake Shack | 2 | 10 | 15 | 0 | 2.48 |
Wingstop presently has a consensus target price of $255.81, indicating a potential upside of 89.82%. Shake Shack has a consensus target price of $89.39, indicating a potential upside of 41.53%. Given Wingstop’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Wingstop is more favorable than Shake Shack.
Summary
Wingstop beats Shake Shack on 10 of the 15 factors compared between the two stocks.
About Wingstop
Wingstop Inc., together with its subsidiaries, franchises and operates restaurants under the Wingstop brand. Its restaurants offer classic wings, boneless wings, tenders, and hand-sauced-and-tossed in various flavors, as well as chicken sandwiches with fries and hand-cut carrots and celery that are cooked-to-order. The company was founded in 1994 and is headquartered in Addison, Texas.
About Shake Shack
Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. The company was founded in 2001 and is headquartered in New York, New York.
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