First Watch Restaurant Group (FWRG) AI Stock Analysis

• Market Cap: $1.05B
• Dividend Yield: N/A
• Average Volume (3M): 1.13M
• Price to Earnings (P/E): 215.5
• Beta (1Y): 0.91
• Revenue Growth: 17.27%
• EPS Growth: -76.53%
• Country: US
• Employees: 15,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.05
• Shares Outstanding: 61,032,104
• 10 Day Avg. Volume: 1,258,778
• 30 Day Avg. Volume: 1,127,344
• PEG Ratio: -2.12
• Price to Book (P/B): 1.88
• Price to Sales (P/S): 1.10
• P/FCF Ratio: -91.12
• Enterprise Value/Market Cap: 1.90
• Enterprise Value/Revenue: 1.71
• Enterprise Value/Gross Profit: 5.07
• Enterprise Value/Ebitda: 22.97
• 1Y Price Target: $22.13
• Price Target Upside: 28.36% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: $17.00 ▼(-1.39% Downside)

The score is held back primarily by weakening profitability, higher leverage, and negative free cash flow, alongside bearish technical signals and an extremely high P/E. These are partially offset by a positive earnings call with strong growth, improving restaurant-level margins, and supportive forward guidance.

Positive Factors

Revenue Growth & Unit Expansion

Sustained top-line expansion driven by frequent new restaurant openings and positive comps increases the company’s revenue base and scale. Growing unit count and 25.6% revenue growth underpin structural demand and provide a multi-month runway for economies of scale and marketing ROI to improve corporate profitability.

Improving Restaurant-Level Margins

An 80bp improvement in unit-level operating profitability reflects better labor or cost deployment, pricing power, and operational execution. Durable margin gains at the unit level translate directly to higher free cash flow potential per restaurant and validate scalable operating practices as the chain grows.

Franchise & Same-Store Strength

Healthy same-store sales and targeted franchise acquisitions expand recurring royalty revenue and reduce company capital intensity per new unit. A mixed company/franchise model supports faster national rollout, revenue diversification, and lower incremental capex needs, sustaining growth over the medium term.

Negative Factors

Sharp Margin Deterioration on Financials

A dramatic drop in reported gross margin and near-zero net margin signal structural profitability pressure possibly from higher COGS, discounting, or mix changes. This weakens the company's ability to convert sales into durable profits and raises execution risk despite revenue growth.

Rising Leverage

Elevated and rising leverage reduces financial flexibility, increases interest exposure, and limits balance sheet capacity to fund growth or weather shocks. With aggressive unit expansion, higher debt amplifies refinancing and covenant risk and constrains long-term capital allocation choices.

Negative Free Cash Flow & Cost Inflation

Negative FCF despite positive operating cash flow indicates that growth and investments are outpacing internal cash generation. Combined with documented commodity and labor inflation pressures, persistent negative FCF can force higher debt, slow openings, or require dilutive financing, harming long-term financial resilience.

First Watch Restaurant Group Business Overview & Revenue Model

Company Description

First Watch Restaurant Group, Inc. operates and franchises restaurants under the First Watch trade name. As of March 23, 2022, it operated 341 company-owned restaurants and 94 franchised restaurants in 28 states in the United States. The company was formerly known as AI Fresh Super Holdco, Inc. and changed its name to First Watch Restaurant Group, Inc. in December 2019. First Watch Restaurant Group, Inc. was founded in 1983 and is headquartered in Bradenton, Florida.

How the Company Makes Money

First Watch Restaurant Group generates revenue through its chain of restaurants, primarily by selling food and beverages to customers dining in or ordering takeout. The company’s core revenue streams include sales from breakfast, brunch, and lunch menu items, which are priced at a premium due to the emphasis on fresh, high-quality ingredients and unique offerings. Additional revenue is derived from catering services and special events. FWRG also benefits from strategic partnerships with suppliers and distributors that provide quality ingredients at competitive prices, enhancing profit margins. The company's robust marketing strategies and brand loyalty initiatives contribute to repeat business and increased customer traffic, further driving revenue growth.

First Watch Restaurant Group Financial Statement Overview

Summary

Revenue is growing, but profitability is weak and deteriorating (TTM net margin 0.30% and sharply lower gross/EBIT/EBITDA margins). Leverage has risen (debt-to-equity 1.62), and free cash flow is negative (-$31.19M TTM), increasing financial risk despite positive operating cash flow.

Income Statement

First Watch Restaurant Group has shown consistent revenue growth, with a 5.83% increase in TTM. However, the gross profit margin has decreased significantly from 78.04% in 2024 to 33.73% in TTM, indicating rising costs or pricing pressures. The net profit margin is low at 0.30% in TTM, down from 1.86% in 2024, suggesting challenges in converting revenue into profit. EBIT and EBITDA margins have also declined, reflecting operational inefficiencies.

Balance Sheet

The company's debt-to-equity ratio has increased to 1.62 in TTM, indicating higher leverage and potential financial risk. Return on equity has decreased to 1.49% in TTM from 3.18% in 2024, showing reduced profitability for shareholders. The equity ratio remains stable, suggesting a balanced asset structure, but the rising debt levels could pose future challenges.

Cash Flow

Operating cash flow remains positive, but free cash flow is negative at -$31.19 million in TTM, indicating cash constraints. The operating cash flow to net income ratio is 0.74, showing adequate cash generation relative to net income. However, the negative free cash flow to net income ratio highlights the need for improved cash management and cost control.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.17B	1.02B	891.55M	730.16M	601.19M	342.39M
Gross Profit	394.46M	792.81M	190.12M	139.53M	124.23M	29.88M
EBITDA	87.02M	98.38M	85.36M	52.05M	52.85M	-16.01M
Net Income	3.55M	18.93M	25.39M	6.91M	-2.11M	-49.68M
Balance Sheet
Total Assets	1.72B	1.51B	1.27B	1.10B	1.05B	1.01B
Cash, Cash Equivalents and Short-Term Investments	20.71M	33.31M	49.63M	49.67M	51.86M	38.85M
Total Debt	982.95M	809.55M	606.97M	507.35M	473.97M	637.90M
Total Liabilities	1.11B	918.97M	705.76M	581.31M	542.49M	686.65M
Stockholders Equity	607.31M	595.39M	561.28M	523.13M	504.43M	320.87M
Cash Flow
Free Cash Flow	-31.18M	-12.28M	10.65M	-393.00K	27.29M	-45.34M
Operating Cash Flow	130.38M	115.67M	95.34M	62.94M	62.97M	-18.36M
Investing Cash Flow	-216.50M	-206.65M	-123.37M	-63.11M	-35.68M	-26.97M
Financing Cash Flow	55.71M	74.33M	28.07M	-2.02M	-14.27M	73.31M

First Watch Restaurant Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 17.24
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FWRG, the sentiment is Positive. The current price of 17.24 is above the 20-day moving average (MA) of 16.40, above the 50-day MA of 16.54, and above the 200-day MA of 16.89, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 57.08 is Neutral, neither overbought nor oversold. The STOCH value of 84.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FWRG.

First Watch Restaurant Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BJRI	71 Outperform	$942.40M	32.79	8.44%	―	3.85%	7.57%
CAKE	66 Neutral	$3.08B	18.77	39.14%	2.11%	4.90%	27.14%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
FWRG	54 Neutral	$1.05B	215.48	0.83%	―	17.27%	-76.53%
CBRL	45 Neutral	$742.41M	44.71	3.89%	3.54%	-1.61%	-58.09%
VENU	44 Neutral	$252.02M	-4.90	-40.00%	―	―	―

First Watch Restaurant Group Corporate Events

First Watch Adds Tech-Focused Director After Advent Exit

On December 23, 2025, First Watch Restaurant Group announced the immediate resignations of directors Tricia Glynn and David Paresky, both tied to the exit of Advent International’s equity investment in the company, with the board emphasizing that there were no disagreements related to operations, policies or practices and simultaneously reducing its size from ten to nine members. On the same day, the board appointed technology entrepreneur and MikMak founder and CEO Rachel Tipograph as a Class II director, effective December 29, 2025, underscoring First Watch’s push to deepen its capabilities in digital transformation and customer acquisition as it continues to scale its daytime dining brand nationwide.

The most recent analyst rating on (FWRG) stock is a Buy with a $23.00 price target. To see the full list of analyst forecasts on First Watch Restaurant Group stock, see the FWRG Stock Forecast page.

First Watch Completes Share Sale with Citigroup

On November 5, 2025, First Watch Restaurant Group, Inc. entered into an underwriting agreement with Citigroup Global Markets Inc. for the sale of 5,289,784 shares by selling shareholders. The offering, which closed on November 7, 2025, did not involve the company selling any shares or receiving proceeds, impacting the company’s financial structure and shareholder composition.

The most recent analyst rating on (FWRG) stock is a Buy with a $24.00 price target. To see the full list of analyst forecasts on First Watch Restaurant Group stock, see the FWRG Stock Forecast page.

First Watch Reports Strong Q3 2025 Financial Results

First Watch Restaurant Group reported strong financial results for Q3 2025, with a 25.6% increase in total revenues and a net income of $3.0 million. The company opened 21 new restaurants and plans aggressive growth, projecting a robust finish to the year with adjusted EBITDA guidance at the high end of its previous range.

The most recent analyst rating on (FWRG) stock is a Buy with a $21.00 price target. To see the full list of analyst forecasts on First Watch Restaurant Group stock, see the FWRG Stock Forecast page.