Yes, Shake Shack IPO is a smart buy because it can be valued at $1 billion. In fact, there has been no shortage in the restaurant industry this year. It might just be the golden ticket this year. The Shack is surely not shaken. It would be a wise move.
In the period of 1970 to 2012, IPOs have in general, underperformed greatly to their existing publicly traded competitors of similar size. This is shown in their 1st, 2nd, 3rd and 5th years after their initial public offering. Only in the fourth year have they outperformed, and that was only by 1.8% against those same competitors.
Although Shake Shack has a good business model and has been growing well lately I'm not sure I would buy. I don't think buying an IPO is a good idea for the average investor. Unless you can get an insider price you often see large swings at the time of the IPO, usually down because often the initial IPO price is higher than the market value should be for the company.
While there are lines and lines of people waiting for one of Shake Shack's burgers, consumer confidence is low when it comes to buying their stocks. While the restaurant is doing well, the overall picture is a "wait and see" attitude based on experience with other investments such as Krispy Kreme. This was a great stock to buy and then it plummeted very quickly. This is a great place to eat but speculate and watch the market for a while before investing.