First Watch Restaurant Group (FWRG) AI Stock Analysis

• Market Cap: $1.08B
• Dividend Yield: N/A
• Average Volume (3M): 722.52K
• Price to Earnings (P/E): 101.2
• Beta (1Y): 0.79
• Revenue Growth: 14.43%
• EPS Growth: -53.71%
• Country: US
• Employees: 15,000
• Sector: Consumer Cyclical
• Sector Strength: 71
• Industry: Restaurants
• EPS (TTM): -0.01
• Shares Outstanding: 60,993,214
• 10 Day Avg. Volume: 558,460
• 30 Day Avg. Volume: 722,518
• PEG Ratio: -2.27
• Price to Book (P/B): 1.68
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -39.92
• Enterprise Value/Market Cap: 1.52
• Enterprise Value/Revenue: 0.41
• Enterprise Value/Gross Profit: 4.51
• Enterprise Value/Ebitda: 4.24
• 1Y Price Target: $21.10
• Price Target Upside: 19.68% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

• Rating: 69 Neutral
• Price Target: $18.50 ▲(4.93%Upside)

First Watch Restaurant Group demonstrates strong revenue growth and operational efficiency, but high debt levels and negative free cash flow are concerns. The stock is technically stable, but the high P/E ratio suggests overvaluation. Earnings call insights highlight both growth potential and margin pressures.

Positive Factors

Customer Traffic

Dine-in traffic improved in April, indicating potential positive trends in customer visits.

Growth and Expansion

The company is expected to benefit from consistent adjusted EBITDA growth with room for multiple expansion.

Sales Performance

Improved sales performance in 2025 should lead the company to receive more credit for the compelling long-term growth story.

Negative Factors

Cost Pressures

The company's EBITDA outlook was significantly reduced due to cost pressures, leading to a sharp stock pullback.

Margin Pressure

Inflation in key commodities like eggs, bacon, coffee, and avocados has pressured restaurant margins significantly.

New Openings Impact

The high number of new openings over the last two quarters has created a more pronounced margin drag from new units.

First Watch Restaurant Group Business Overview & Revenue Model

Company Description

First Watch Restaurant Group (FWRG) is a leading daytime dining concept operating in the United States. Specializing in breakfast, brunch, and lunch, First Watch offers a diverse menu that includes traditional favorites, health-conscious options, and seasonal specialties. The company's restaurants are known for their fresh ingredients, farm-to-table ethos, and welcoming atmosphere.

How the Company Makes Money

First Watch Restaurant Group generates revenue primarily through the sale of food and beverages at its company-owned and franchised restaurants. The company capitalizes on its unique operating hours, focusing on daytime dining, which reduces labor and operational costs. Additionally, First Watch benefits from its strong brand presence and customer loyalty, which drive consistent traffic to its locations. The company also engages in strategic partnerships and marketing initiatives to enhance its brand visibility and attract new customers.

First Watch Restaurant Group Financial Statement Overview

Summary

First Watch Restaurant Group has shown consistent revenue growth and improving profitability metrics, but high debt levels and negative free cash flow pose risks. The company needs to enhance profit margins and manage debt effectively to sustain growth.

Income Statement

First Watch Restaurant Group has demonstrated consistent revenue growth, with a notable increase in total revenue over the past years. The gross profit margin has shown improvement, indicating efficient cost management. However, the net profit margin remains relatively low, suggesting room for improvement in cost control or pricing strategies. The EBIT and EBITDA margins indicate moderate operational efficiency, but there's potential for further enhancement.

Balance Sheet

The company's debt-to-equity ratio is relatively high, indicating a higher reliance on debt financing, which could pose risks in volatile market conditions. Return on equity has improved, reflecting better utilization of equity for generating profits. The equity ratio suggests a decent level of equity financing, contributing to financial stability, but the high debt levels may still be a concern.

Cash Flow

First Watch Restaurant Group shows a positive trend in operating cash flow, which is commendable. However, the company has experienced negative free cash flow, primarily due to significant capital expenditures. The operating cash flow to net income ratio is strong, indicating good cash conversion efficiency, but the negative free cash flow to net income ratio suggests challenges in converting earnings into free cash.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.02B	891.55M	730.16M	601.19M	342.39M
Gross Profit	792.81M	190.12M	139.53M	127.55M	29.88M
EBITDA	98.38M	85.36M	54.73M	59.71M	-4.29M
Net Income	18.93M	25.39M	6.91M	-2.11M	-49.68M
Balance Sheet
Total Assets	1.51B	1.27B	1.10B	1.05B	1.01B
Cash, Cash Equivalents and Short-Term Investments	33.31M	49.63M	49.67M	51.86M	38.85M
Total Debt	809.55M	606.97M	507.35M	473.97M	637.90M
Total Liabilities	918.97M	705.76M	581.31M	542.49M	686.65M
Stockholders Equity	595.39M	561.28M	523.13M	504.43M	320.87M
Cash Flow
Free Cash Flow	-12.28M	10.65M	-393.00K	27.29M	-45.34M
Operating Cash Flow	115.67M	95.34M	62.94M	62.97M	-18.36M
Investing Cash Flow	-206.65M	-123.37M	-63.11M	-35.68M	-26.97M
Financing Cash Flow	74.33M	28.07M	-2.02M	-14.27M	73.31M

First Watch Restaurant Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 17.63
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 17.63 is above the 20-day moving average (MA) of 17.11, above the 50-day MA of 16.37, and below the 200-day MA of 17.88, indicating a bullish trend. The MACD of 0.35 indicates Negative momentum. The RSI at 64.06 is Neutral, neither overbought nor oversold. The STOCH value of 53.69 is Neutral, 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
CAKE	74 Outperform	$3.27B	20.72	46.60%	1.58%	4.42%	48.23%
PTLO	72 Outperform	$857.38M	26.52	7.37%	―	4.57%	6.89%
CBRL	71 Outperform	$1.52B	26.45	12.90%	1.74%	2.84%	-4.44%
FWRG	69 Neutral	$1.08B	101.21	1.86%	―	14.43%	-53.71%
GENK	67 Neutral	$130.54M	36.29	-1.62%	0.75%	14.40%	-114.79%
BJRI	66 Neutral	$903.65M	43.51	6.01%	―	2.91%	-4.86%
Sector *	63 Neutral	$17.32B	10.90	-7.25%	3.10%	1.66%	-25.40%

First Watch Restaurant Group Corporate Events

First Watch Holds Annual Stockholders Meeting

On May 21, 2025, First Watch Restaurant Group held its Annual Meeting of Stockholders, where stockholders elected Class I directors and ratified PricewaterhouseCoopers LLP as the independent accounting firm for the fiscal year ending December 28, 2025. These decisions are expected to impact the company’s governance and financial oversight positively, ensuring continuity and stability in its operations.

The most recent analyst rating on (FWRG) stock is a Buy with a $26.00 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 Q1 2025 Revenue Growth

First Watch Restaurant Group reported a 16.4% increase in total revenues for Q1 2025, despite a net loss of $0.8 million. The company opened 13 new restaurants across 10 states, bringing the total to 584 system-wide locations. Same-restaurant sales grew by 0.7%, although traffic slightly declined by 0.7%. The company updated its fiscal year 2025 guidance, projecting adjusted EBITDA between $114 million and $119 million, with plans to open 59 to 64 new restaurants. Despite macroeconomic uncertainties, First Watch remains optimistic about its growth and development pipeline.