Shake Shack (NYSE:SHAK) has long been a battleground stock.

Shares of the fast-casual burger slinger have rocked back and forth over its five-year history. The stock trades at a lofty P/E ratio due to its growth potential, but has also been heavily shorted, with 19% of the float sold short today.

However, Shake Shack seems to have won the latest battle with the bears after the stock jumped 13.5% over the last two sessions, following its presentation at the ICR conference Tuesday morning.

While a bullish note from Goldman Sachs, focusing on the company's integration with Grubhub, helped lift the stock, I suspect the real reason Shake Shack shares climbed so much in the two sessions -- the stock was up 19% at one point -- has to do with the tone CEO Randy Garutti set in the presentation. 

A Shake Shack burger

IMAGE SOURCE: SHAKE SHACK.

Punching above its weight

Shake Shack is a small company, with just 254 restaurants as of its latest report, but its brand has always had outsize influence.

Part of that has to do with the company's slow growth from just one location in New York's Madison Square Park, while it also benefits from its reputation for high-quality food and occasional tie-ups with well-known chefs.

At the time of its IPO five years ago, management said it believed it could expand to at least 450 domestic company-operated locations.  Back then, Shake Shack had just 31 company-operated restaurants, meaning that figure represented 15 times what it had then. Today, however, Shake Shack already has 151 domestic company-owned locations, and is adding roughly 40 a year. 

Shake Shack hasn't addressed the ceiling for its growth in the U.S. recently, but based on Garutti's statements, management seems to think it's significantly higher than 450 locations. 

Garutti spent much of the presentation talking about "white space" opportunities, or room in the market for the company to penetrate. For instance, he pointed out that there are only nine states in the country with more than five Shacks. On the other hand, there are 22 states where the company has fewer than five locations, meaning it has a lot of room for growth around the country.

As it's expanded, Shake Shack has also experimented with new formats, including airport locations, event spaces like baseball stadiums, roadside restaurants in rest areas, digital orders with the help of its Grubhub partnership, as well as food trucks and mall food court locations.

Garutti implied that the company wasn't afraid to cannibalize existing restaurants, saying that you might see a Shake Shack inside a mall food court and then find a free-standing location nearby outside. He summed up the company's growth ambition by saying, "We are going after market share... We want to sell every great burger we can in every great city." 

Shake Shack's restaurants have higher average unit volumes than any major chain except Chick-Fil-A, and considering its popularity and that it's still much smaller than most of the best-known fast-food chains, the company should have a long tail of growth ahead of it, well beyond 450 locations.

It's a global brand, too

Shake Shack's opportunity doesn't just lie within U.S. borders. The company has already demonstrated its ability to expand around the world into countries like Mexico, the U.K., Turkey, and across Asia.

One of its biggest opportunities may be in China, where the company has just three locations in Shanghai, and its first restaurant in Beijing set to open later this year.

On China, Garutti said, "We have three restaurants in Shanghai. I'll be going there a couple of times this year, because this market is so important for us to understand, evolve, and see how we do. We've had extraordinary success there so far in the first three."

While the company doesn't break out data on international markets, Shake Shack has seen a tremendous response to openings in places like Hong Kong and Seoul, a strong indicator that the brand has a lot of room to run in those markets. China is a proven market for American fast-food brands, and could be a huge opportunity for Shake Shack.

Finally, digital and delivery present appealing growth potential for a chain like Shake Shack that favors high-density, high-traffic markets like New York City. Much like Chipotle has seen a ramp-up in growth from digital orders, Shake Shack could experience something similar as the company renovates stores to accommodate digital ordering.

Shake Shack shares remain pricey at a P/E around 100, but this stock can't be measured like the typical restaurant chain.

Shake Shack's modest comparable sales growth may make it look like a middling restaurant stock, but the real opportunity for the company, as I've argued before, is in its expansion. It already has industry-high average unit volumes, a well-respected brand, and a much smaller footprint than most national fast-food chains.

The investor battle over Shake Shack is far from over, but Garutti made it clear that there's still a tremendous opportunity in front of the company -- and a lot of reasons to believe in Shake Shack stock.