First Watch Restaurant Group (FWRG)
NASDAQ:FWRG
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First Watch Restaurant Group
(NASDAQ:FWRG)
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Rating:58Neutral
Price Target:
$14.00
▲(9.80% Upside)
Action:ReiteratedDate:04/23/26
The score is driven primarily by mixed financial performance—rapid top-line scaling but thin profitability, negative recent free cash flow, and still-elevated leverage. The latest earnings call is a positive offset with constructive 2026 growth/EBITDA guidance and strong new-unit performance, while valuation is demanding (high P/E) and corporate leadership changes add execution risk. Technically, momentum has improved short term but remains below longer-term trend levels.
Positive Factors
Unit Growth & New‑Unit Outperformance
Sustained, repeatable unit growth and a record 2025 development cadence create a durable growth engine. New-unit sales running materially above underwriting and a larger store base expand system sales, franchise economics and scale benefits for purchasing, marketing and operations over the next several years.
Negative Factors
Elevated Leverage & Negative Free Cash Flow
Higher leverage and recurring negative free cash flow constrain financial flexibility during an aggressive expansion plan. Debt-servicing needs plus negative FCF increase dependence on external financing or slower reinvestment, raising execution risk if traffic or margins weaken amid higher interest rates.
Read all positive and negative factors
Positive Factors
Negative Factors
Unit Growth & New‑Unit Outperformance
Sustained, repeatable unit growth and a record 2025 development cadence create a durable growth engine. New-unit sales running materially above underwriting and a larger store base expand system sales, franchise economics and scale benefits for purchasing, marketing and operations over the next several years.
Read all positive factors
First Watch Restaurant Group (FWRG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$795.58M
Dividend YieldN/A
Average Volume (3M)1.13M
Price to Earnings (P/E)15.5
Beta (1Y)1.11
Revenue Growth20.34%
EPS Growth1.34%
CountryUS
Employees15,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)0.24
Shares Outstanding61,625,156
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 Cap1.90
Enterprise Value/Revenue1.23
Enterprise Value/Gross Profit9.46
Enterprise Value/Ebitda13.86
Forecast
1Y Price Target
$19.09Price Target Upside49.73% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
EPS Forecast (FY)0.2
Revenue Forecast (FY)$1.39B
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 w...
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 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.
Data provided by:
The Fly
The FlyFirst Watch Restaurant Group Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call presents a broadly positive outlook: the company reported strong top-line growth (>20%), significant adjusted EBITDA expansion (+38.7% in the quarter), healthy restaurant-level margins (~18.5%-19%), record unit openings with new-unit sales running ~19% above underwriting, and early, repeatable marketing/delivery initiatives that generated positive returns. Management provided constructive 2026 guidance (same-store sales +1% to +3%, total revenue +12%–14%, adjusted EBITDA $132M–$140M) while acknowledging industry traffic headwinds, commodity and labor inflation, near-term weather and G&A timing impacts, and a planned CFO transition. On balance, the highlights (robust growth, margin resilience, scalable marketing, development momentum, and strong employee metrics) outweigh the manageable near-term headwinds and execution risks.Positive Updates
Strong Top-Line Growth
Total revenue grew more than 20% for 2025; fourth quarter revenue was $316.4M, up 20.2% year-over-year.
Negative Updates
Traffic Headwinds and Industry Outlook
Same-restaurant traffic was negative 1.9% in the fourth quarter. Industry data (Black Box) cited by management forecasts roughly a 3% industry-wide same-restaurant traffic decline for 2026, creating a tougher macro backdrop.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Top-Line Growth
Total revenue grew more than 20% for 2025; fourth quarter revenue was $316.4M, up 20.2% year-over-year.
Read all positive updates
Company Guidance
Management's 2026 guidance calls for same‑restaurant sales growth of 1%–3% and total revenue growth of 12%–14% (including ~100 bps from acquisitions); 59–63 net new system‑wide restaurants (53–55 company‑owned and 9–11 franchise, net of three planned company‑owned closures); adjusted EBITDA of $132M–$140M (including ~ $2M from 19 restaurants acquired in April); and capital expenditures of $150M–$160M. They expect full‑year commodity inflation of 1%–3% (coffee and bacon up, eggs and avocados easing), restaurant‑level labor inflation of 3%–5%, carried pricing of ~4% in H1 blending to ~2% for the full year (no price taken in January), positive same‑restaurant sales in every quarter, and noted Q1 headwinds from weather and a materially higher Q1 G&A related to timing of the leadership conference.First Watch Restaurant Group Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
55
Neutral
Cash Flow
49
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.22B | 1.02B | 891.55M | 730.16M | 601.19M |
| Gross Profit | 159.44M | 792.81M | 190.12M | 139.53M | 124.23M |
| EBITDA | 108.78M | 98.38M | 85.36M | 52.05M | 52.85M |
| Net Income | 19.43M | 18.93M | 25.39M | 6.91M | -2.11M |
Balance Sheet | |||||
| Total Assets | 1.74B | 1.51B | 1.27B | 1.10B | 1.05B |
| Cash, Cash Equivalents and Short-Term Investments | 21.25M | 33.31M | 49.63M | 49.67M | 51.86M |
| Total Debt | 739.60M | 809.55M | 606.97M | 507.35M | 473.97M |
| Total Liabilities | 1.12B | 918.97M | 705.76M | 581.31M | 542.49M |
| Stockholders Equity | 626.28M | 595.39M | 561.28M | 523.13M | 504.43M |
Cash Flow | |||||
| Free Cash Flow | -30.99M | -12.28M | 10.65M | -393.00K | 27.29M |
| Operating Cash Flow | 125.91M | 115.67M | 95.34M | 62.94M | 62.97M |
| Investing Cash Flow | -213.76M | -206.65M | -123.37M | -63.11M | -35.68M |
| Financing Cash Flow | 75.79M | 74.33M | 28.07M | -2.02M | -14.27M |
First Watch Restaurant Group Technical Analysis
Neutral
12.75
Price Trends
12.90
Negative
14.72
Negative
15.98
Negative
Market Momentum
-0.18
Negative
58.54
Neutral
90.80
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FWRG, the sentiment is Neutral. The current price of 12.75 is above the 20-day moving average (MA) of 11.33, below the 50-day MA of 12.90, and below the 200-day MA of 15.98, indicating a neutral trend. The MACD of -0.18 indicates Negative momentum. The RSI at 58.54 is Neutral, neither overbought nor oversold. The STOCH value of 90.80 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 1 New Risks
1.
Matters relating to employment and labor law could have a material adverse effect on our business, financial condition and results of operations. Q4, 2025
First Watch Restaurant Group Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $3.12B | 15.71 | 37.06% | 2.11% | 4.75% | -3.19% | |
69 Neutral | $786.34M | 17.08 | 13.19% | ― | 3.08% | 212.05% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $795.58M | 15.51 | 2.96% | ― | 20.34% | 1.34% | |
48 Neutral | $225.10M | -6.94 | -39.92% | ― | 0.35% | -37.47% | |
45 Neutral | $693.78M | 131.25 | -0.90% | 3.54% | -4.13% | -111.07% |
* Consumer Cyclical Sector Average
FWRG
First Watch Restaurant Group
12.91
-5.38
-29.41%
BJRI
BJ's Restaurants
37.41
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11.70%
CBRL
Cracker Barrel
31.04
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CAKE
Cheesecake Factory
62.67
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32.74%
VENU
Venu Holding Corporation
3.73
-4.20
-52.96%
First Watch Restaurant Group Corporate Events
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...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
First Watch Issues 2026 Outlook Amid CFO Retirement
Positive
Feb 24, 2026
First Watch Restaurant Group reported that in fiscal 2025, ended December 28, total revenues rose 20.3% to $1.2 billion and system-wide sales climbed to $1.4 billion, driven by 3.6% same-restaurant sales growth, modest positive traffic, and the op...
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.