What happened

Shake Shack (NYSE:SHAK) rose 4.5% on Tuesday after two separate analyst teams upgraded its stock.

So what 

Goldman Sachs analyst Jared Garber lifted his rating on Shake Shack from neutral to buy. He sees the restaurant stock rising to $109 per share, or about 23% higher than its current price near $88.

Garber believes the stock's sharp decline following its first-quarter earnings report earlier this month is presenting investors with a chance to pick up shares at an attractive discount. Although he cautions that sales at Shake Shack's urban locations could face short-term coronavirus-related challenges, Garber argues that the company's long-term expansion strategy remains intact.

People eating hamburgers.

Image source: Getty Images.

Meanwhile, Wedbush analyst Nick Setyan raised his rating on Shake Shack's stock from neutral to outperform. He sees its share price climbing as high as $118. 

Like Garber, Setyan argues that investors are placing too much emphasis on Shake Shack's near-term struggles and overlooking the likelihood of a longer-term recovery. Thus, he thinks the stock's recent decline was an overreaction -- one that more patient investors should use as a buying opportunity. 

Now what

Garber also cited Shake Shack's cash-rich balance sheet, which should allow it to both build new restaurants and strengthen its delivery network. Setyan likewise highlighted the burger-chain's expansion potential: He posits that Shake Shack can ultimately have over 1,000 stores in the U.S. alone, up from 320 today. 

If these analysts are correct and the company can successfully triple its store count, Shake Shack's shareholders are likely to be well rewarded in the coming years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.