The New York company's strong unit economics drive the industry's best unit-growth story, according to Oppenheimer analyst Michael Tamas.
"Our work also identifies catalysts for a bullish recovery in same-store sales and we also highlight a path for margin-driven Ebitda upside vs. consensus through 2022," Tamas said.
"Improving investor sentiment could serve as an incremental tailwind for [the] shares as only 20% of analysts' ratings are bullish -- the lowest buy-rated name in the group."
The firm says Wall Street underestimates Shake Shack's recovery in sales, margins and unit growth over the next two years. The investment firm's checks suggest earnings before interest, taxes, depreciation and amortization are 10% above consensus estimates.
Shake Shack shares at last check rose 2.3% to $74.19. The stock is 18% below its 52-week high above $85, set almost exactly one year ago. Its year low was just above $30, set in mid-March.
There is an opportunity to "quickly" close that gap as benefits of new operational and strategic plans become more appreciated by the investor community, Tamas said.
The firm's $90 price target represents a multiple of 32 times its 2022 Ebitda estimate. That year will be the first normalized profit year for Shake Shack, according to Friday's note.
Oppenheimer notes that prior to covid, Shake Shack enjoyed a company-owned average unit volume of more than $4 million, double its peer average of $2 million and second only to Chick-fil-A within the limited-service sector.