Shake Shack shares dipped again today after Goldman Sachs analysts downgraded the stock from Neutral to Sell with a price target of $37 per share. Shares fell as much as 2.51% to $50.43 per share in afternoon trading today. Despite the downgrade, however, Goldman analysts remain constructive on the fast food chain’s long-term opportunities.

Shake Shack valuation remains high

In a report dated July 9, analyst Karen Holthouse and her team said Shake Shack is one of the stocks with the most downside possible to their price target within their coverage universe. She sees a 29% downside risk compared to the average 6% upside for all of their coverage. This is why they downgraded Shake Shack.

Even though the restaurant chain has seen a 35% decline in share price in just the last month, its stock is still trading at 70 times their NTM EBITDA estimate. That’s quite a bit higher than the company’s peer group, which is why the risk/ reward is skewed so far to the negative.

Further, Holthouse sees the potential for even more selling of Shake Shack shares after reviewing analysis of initial public offerings held between 1995 and 2014. Unsurprisingly, the analysis indicates that most stocks underperform in the weeks right before and right after the expiration of a lockup period on a company’s shares. Shake Shack’s next lockup period expires on July 29. (Graphs/ charts are courtesy Goldman Sachs.)

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Long term potential remains

In spite of these near term concerns, the Goldman Sachs analyst likes Shake Shack’s growth potential. So far this year, the company has reported strong unit growth and now is only at 8% of its expected capacity in the U.S. She expects to see unit growth continue to be between 10 and 15 per year.

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She thinks the company’s presence in “destination markets,” plus its strong appeal to the Millennial generation are good indications of future potential. In terms of Millennial appeal, she noted that Shake Shack has a unique way to connect with the generation. Some of its selling points include a culture that illustrates a “stand for something good,” “real food cues,” involvement in its local communities and a strong presence on social media.

Also buzz around the Shake Shack brand remains positive, and Holthouse said search interest on Google is still high, as is the brand’s Yelp rating in New York.

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She expects these factors to drive further growth in traffic in the chain’s restaurants.