What happened

Shares of burger-chain Shake Shack (NYSE:SHAK) rose on Wednesday, one day after the company presented at the ICR Conference. An analyst at Goldman Sachs was impressed by what the company had to say, pointing to significant upside for the stock. Shares of Shake Shack were up 8.3% at 12:30 p.m. EST, after being up as much as 12% earlier in the day.

So what

Goldman analyst Katherine Fogertey kept a buy rating on Shake Shack stock following the presentation. A price target of $115 per share represents 65% upside from the current stock price.

Six Shake Shack burgers lined up in two rows.

Image source: Shake Shack.

The main reason for the optimism is Shake Shack's partnership with delivery company GrubHub. Shake Shack said in its ICR Conference presentation that it had completed its point-of-sale integration with GrubHub and is doing a phased transition to using GrubHub as its exclusive delivery partner. The venture includes joint marketing initiatives, and the restaurant chain will have access to customer data generated by delivery orders.

Fogertey sees this GrubHub relationship as enough of a positive to warrant a sky-high price target on the stock.

Now what

Shake Shack is not a cheap stock, even after losing a lot of ground over the past few months. With the stock now trading around $69 per share, the price-to-sales ratio based on the company's full-year guidance is nearly 4.5. And based on the average analyst estimate for adjusted earnings, the price-to-earnings ratio is over 100.

Shake Shack has plenty of room to grow its restaurant count, so total revenue should expand at a brisk pace. But same-store-sales growth has been sluggish -- just 2% in the third quarter. Delivery might help, but the stock's premium valuation may not be justified by the fundamentals.