Fickle appetites

 

When Shake Shack soared to $52.49 on 30^th January, 2015 it was considered somewhat of a revolution and a cult figure. With the Washington Post, even hailing it as the next “new restaurant empire” giving McDonald’s enough reasons to be afraid. 

18 months down the line, it seems the King doesn’t look appetizing enough. With after-hours price of $37.05, SHAK is down almost 29% from its listing high and 60% down from its lifetime high of $92.86. Au contraire, MCD has outperformed SHAK by almost 38% over the past 18 months. 

SHAK's PE of 122 causes investor anguish at a relatively slower growth rate. MCD, on the other hand, with a PE of 22 is relatively immune from such high expectations. 

Like investor preferences, appetites can be quite fickle.

Source: Google Finance