First Watch Restaurant Group (FWRG)
NASDAQ:FWRG
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First Watch Restaurant Group
(NASDAQ:FWRG)
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Rating:55Neutral
Price Target:
$11.00
▼(-13.73% Downside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by improving fundamentals and supportive FY26 guidance/EBITDA outlook, but held back by leverage and negative recent free cash flow. Technicals are mixed with a weak longer-term trend, and valuation is disadvantaged by a negative P/E and no dividend yield provided.
Positive Factors
Unit Growth/Scale
A committed unit growth plan (59–63 net new restaurants in 2026 and a target to scale toward ~2,200 locations) supports durable revenue expansion, franchise royalty upside, and potential operating leverage. If executed with site discipline, scale can lower per-unit G&A and spread marketing and tech investments across a larger base.
Negative Factors
Elevated Leverage
Meaningful leverage limits financial flexibility to fund growth or absorb shocks. With debt sizable relative to earnings, interest and principal obligations can constrain reinvestment, complicate opportunistic capital allocation, and increase downside risk if same-restaurant sales or margins deteriorate.
Read all positive and negative factors
Positive Factors
Negative Factors
Unit Growth/Scale
A committed unit growth plan (59–63 net new restaurants in 2026 and a target to scale toward ~2,200 locations) supports durable revenue expansion, franchise royalty upside, and potential operating leverage. If executed with site discipline, scale can lower per-unit G&A and spread marketing and tech investments across a larger base.
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
$676.24M
Dividend YieldN/A
Average Volume (3M)1.13M
Price to Earnings (P/E)―
Beta (1Y)1.15
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 Cap2.09
Enterprise Value/Revenue1.11
Enterprise Value/Gross Profit6.10
Enterprise Value/Ebitda12.91
Forecast
1Y Price Target
$19.09Price Target Upside49.73% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)0.18
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 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 | 109.59M | 108.78M | 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 | 761.92M | 739.60M | 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
11.83
Negative
13.60
Negative
15.39
Negative
Market Momentum
-0.38
Positive
38.32
Neutral
16.67
Positive
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 12.05, above the 50-day MA of 11.83, and below the 200-day MA of 15.39, indicating a bearish trend. The MACD of -0.38 indicates Positive momentum. The RSI at 38.32 is Neutral, neither overbought nor oversold. The STOCH value of 16.67 is Positive, 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 |
|---|---|---|---|---|---|---|---|
70 Outperform | $922.01M | 20.55 | 11.97% | ― | 3.02% | 110.25% | |
67 Neutral | $3.00B | 12.87 | 38.34% | 2.11% | 5.14% | 8.17% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
55 Neutral | $676.24M | -57.65 | 2.85% | ― | 20.41% | 59.88% | |
45 Neutral | $670.08M | 131.25 | -0.90% | 3.54% | -4.13% | -111.07% | |
42 Neutral | $212.11M | -0.02 | -30.08% | ― | 5.20% | -6.01% |
* Consumer Cyclical Sector Average
FWRG
First Watch Restaurant Group
10.97
-4.58
-29.45%
BJRI
BJ's Restaurants
43.87
2.30
5.53%
CBRL
Cracker Barrel
29.98
-23.40
-43.84%
CAKE
Cheesecake Factory
60.30
8.81
17.11%
VENU
Venu Holding Corporation
3.55
-5.60
-61.20%
First Watch Restaurant Group Corporate Events
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...
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.