First Watch Restaurant Group (FWRG)
NASDAQ:FWRG
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First Watch Restaurant Group
(NASDAQ:FWRG)
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Rating:53Neutral
Price Target:
$11.50
▼(-9.80% Downside)
Action:Reiterated
Date:06/09/26
The score is held back primarily by leveraged fundamentals with negative recent free cash flow and a clear bearish price trend. Offsetting these are improving operating performance and a modestly more constructive outlook from the latest earnings call (raised EBITDA guidance), but valuation remains demanding versus still-thin GAAP profitability and traffic pressure.
Positive Factors
Strong Top-Line Growth
Sustained multi-year revenue growth and a 17.3% Q1 increase reflect expanding market penetration and rising system sales. A growing revenue base supports operating leverage and recurring cash flow potential, underpinning the company’s ability to scale margins and fund disciplined expansion over months.
Negative Factors
Elevated Leverage
Meaningful leverage relative to the earnings base reduces financial flexibility and raises refinancing vulnerability. Elevated debt limits the company's ability to self-fund growth or absorb shocks, increasing reliance on external capital if cash generation weakens over the coming months.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Top-Line Growth
Sustained multi-year revenue growth and a 17.3% Q1 increase reflect expanding market penetration and rising system sales. A growing revenue base supports operating leverage and recurring cash flow potential, underpinning the company’s ability to scale margins and fund disciplined expansion over months.
Read all positive factors
First Watch Restaurant Group Key Performance Indicators (KPIs)
Any
Revenue by Segment
Splits revenue into company‑owned restaurants, franchise royalties/fees and other streams, highlighting whether growth and margins are being driven by capital‑intensive store openings or the more scalable, recurring income from franchising and corporate services.
Splits revenue into company‑owned restaurants, franchise royalties/fees and other streams, highlighting whether growth and margins are being driven by capital‑intensive store openings or the more scalable, recurring income from franchising and corporate services.
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The Fly
The FlyFirst Watch Restaurant Group (FWRG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$715.08M
Dividend YieldN/A
Average Volume (3M)1.13M
Price to Earnings (P/E)40.0
Beta (1Y)1.26
Revenue Growth20.41%
EPS Growth59.88%
CountryUS
Employees15,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)0.29
Shares Outstanding61,644,886
10 Day Avg. Volume1,258,778
30 Day Avg. Volume1,127,344
Financial Highlights & Ratios
PEG Ratio15.01
Price to Book (P/B)1.50
Price to Sales (P/S)0.77
P/FCF Ratio-30.35
Enterprise Value/Market Cap2.40
Enterprise Value/Revenue1.35
Enterprise Value/Gross Profit7.40
Enterprise Value/Ebitda15.84
Forecast
1Y Price Target
$18.63Price Target Upside46.08% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)0.17
Revenue Forecast (FY)$1.38B
First Watch Restaurant Group Business Overview & Revenue Model
Company Description
First Watch Restaurant Group, Inc. oversees and licenses restaurant operations under the First Watch brand. As of March 23, 2022, its extensive presence included 341 company-owned eateries and 94 franchised outlets, operating across 28 U.S. states...
How the Company Makes Money
First Watch primarily makes money by selling food and beverages to guests at its company-owned restaurants. The core revenue stream is restaurant sales generated from dine-in transactions and off-premises orders (e.g., online or takeout where offe...
First Watch Restaurant Group Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call presented several meaningful operational and financial positives: robust revenue growth (+17.3%), adjusted EBITDA expansion (+22.2%) and sizable restaurant-level margin improvement (+200 bps), driven by successful marketing and a well-received new core menu. Key strategic priorities (marketing rollout, menu innovation, disciplined development) are showing early traction. Offsetting items include negative same-restaurant traffic (-2.0%), a reported net loss of $2.7M, modest GAAP operating income (0.3%), and ongoing inflationary/labor pressures (commodity inflation 1%–3%, labor 3%–5%). Overall, management reiterated revenue and same-store guidance, raised the low end of adjusted EBITDA guidance, and emphasized confidence in execution and pipeline. On balance, the positive operational momentum and guidance actions outweigh the challenges, though execution risk and macrocost pressures remain.Positive Updates
Strong Top-Line Growth
Total first quarter revenues increased 17.3% to $331.0 million versus prior year, driven by same-restaurant sales growth and contributions from newly opened/acquired restaurants.
Negative Updates
Negative Same-Restaurant Traffic
Same-restaurant traffic declined 2.0% in the quarter; management cited weather-driven impact of ~100 basis points and customary planned sales transfer as contributors to the decline.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Top-Line Growth
Total first quarter revenues increased 17.3% to $331.0 million versus prior year, driven by same-restaurant sales growth and contributions from newly opened/acquired restaurants.
Read all positive updates
Company Guidance
Management reiterated fiscal 2026 targets: same-restaurant sales growth of 1–3% (positive comps in every quarter), total revenue growth of 12–14% (≈100 bps contribution from acquisitions), carry pricing ~4% in H1 blending to ~2% for the full year, and raised adjusted EBITDA guidance to $133–$140 million (from $132–$140m); they expect full-year commodity inflation of 1–3% and restaurant-level labor inflation of 3–5%, plan capital expenditures of $150–$160 million, forecast 59–63 net new system-wide restaurants (53–55 company‑owned, 9–11 franchise‑owned) with 3 company‑owned closures, expect the 19 acquired restaurants to contribute roughly $2 million to adjusted EBITDA, and noted several million of marketing spend pulled into Q2 with Q2 G&A expected to approximate Q1.First Watch Restaurant Group Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
54
Neutral
Cash Flow
43
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.27B | 1.22B | 1.02B | 891.55M | 730.16M | 601.19M |
| Gross Profit | 231.77M | 159.44M | 792.81M | 190.12M | 139.53M | 124.23M |
| EBITDA | 108.23M | 103.84M | 98.38M | 85.36M | 52.05M | 52.85M |
| Net Income | 17.58M | 19.43M | 18.93M | 25.39M | 6.91M | -2.11M |
Balance Sheet | ||||||
| Total Assets | 1.77B | 1.74B | 1.51B | 1.27B | 1.10B | 1.05B |
| Cash, Cash Equivalents and Short-Term Investments | 23.57M | 21.25M | 33.31M | 49.63M | 49.67M | 51.86M |
| Total Debt | 1.03B | 1.01B | 809.55M | 606.97M | 507.35M | 473.97M |
| Total Liabilities | 1.15B | 1.12B | 918.97M | 705.76M | 581.31M | 542.49M |
| Stockholders Equity | 627.66M | 626.28M | 595.39M | 561.28M | 523.13M | 504.43M |
Cash Flow | ||||||
| Free Cash Flow | -9.46M | -30.99M | -12.28M | 10.65M | -393.00K | 27.29M |
| Operating Cash Flow | 140.23M | 125.91M | 115.67M | 95.34M | 62.94M | 62.97M |
| Investing Cash Flow | -206.69M | -213.76M | -206.65M | -123.37M | -63.11M | -35.68M |
| Financing Cash Flow | 71.42M | 75.79M | 74.33M | 28.07M | -2.02M | -14.27M |
First Watch Restaurant Group Technical Analysis
Negative
12.75
Price Trends
11.72
Negative
12.69
Negative
14.73
Negative
Market Momentum
-0.01
Negative
51.32
Neutral
61.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FWRG, the sentiment is Negative. The current price of 12.75 is above the 20-day moving average (MA) of 11.18, above the 50-day MA of 11.72, and below the 200-day MA of 14.73, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 51.32 is Neutral, neither overbought nor oversold. The STOCH value of 61.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FWRG.
First Watch Restaurant Group Risk Analysis
First Watch Restaurant Group disclosed 49 risk factors in its most recent earnings report. First Watch Restaurant Group reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
First Watch Restaurant Group Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $1.09B | 25.00 | 11.97% | ― | 3.02% | 110.25% | |
67 Neutral | $3.64B | 21.32 | 38.34% | 2.11% | 5.14% | 8.17% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
53 Neutral | $715.08M | 40.00 | 2.85% | ― | 20.41% | 59.88% | |
51 Neutral | $977.88M | 37.40 | 5.89% | 3.54% | -4.92% | -54.90% | |
49 Neutral | $169.69M | -2.04 | -29.57% | ― | 5.20% | -6.01% |
* Consumer Cyclical Sector Average
FWRG
First Watch Restaurant Group
11.48
-3.84
-25.07%
BJRI
BJ's Restaurants
52.40
6.88
15.11%
CBRL
Cracker Barrel
43.88
-13.67
-23.76%
CAKE
Cheesecake Factory
75.52
17.75
30.74%
VENU
Venu Holding Corporation
2.67
-10.77
-80.13%
First Watch Restaurant Group Corporate Events
Business Operations and StrategyExecutive/Board Changes
First Watch Appoints New CFO to Drive Growth
Positive
Jun 8, 2026
On June 8, 2026, First Watch Restaurant Group announced that its board appointed Ashlee Weisser as chief financial officer, effective the same date, following her tenure as senior vice president of financial planning and analysis since October 202...
Executive/Board ChangesShareholder Meetings
First Watch Shareholders Back Directors, Pay and Auditor
Positive
May 21, 2026
On May 20, 2026, First Watch Restaurant Group, Inc. held its Annual Meeting of Stockholders, where investors elected all three Class II director nominees, Irene Chang Britt, Charles Jemley and Rachel Tipograph, to serve until the 2029 annual meeti...
Business Operations and StrategyFinancial Disclosures
First Watch Raises 2026 EBITDA Outlook Amid Strong Growth
Positive
May 5, 2026
On May 5, 2026, First Watch Restaurant Group reported first‑quarter 2026 results showing total revenues up 17.3% to $331.0 million and system‑wide sales up 13.8% versus a year earlier, driven in part by 16 net new system‑wide ope...
Business Operations and StrategyExecutive/Board Changes
First Watch Restructures Operations After COO Departure
Negative
Mar 27, 2026
On March 27, 2026, First Watch Restaurant Group, Inc. terminated the employment of its Chief Operations Officer, Dan Jones, as part of a restructuring of the company’s operations leadership structure. Following his departure, the companyR...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.