First Watch Restaurant Group, Inc. (FWRG)
Valuation Overview•Is First Watch Restaurant Group, Inc. Overvalued or Undervalued?
Commands a premium valuation multiple over its peers, likely pricing in superior execution.
Fragile underlying quality score of 35/100; weak margins or elevated debt leverage warrant caution.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Mixed fundamental profile with offsetting strengths and weaknesses.
Wall Street is highly bullish, projecting significant upside. The company currently retains all capital for reinvestment and growth rather than returning it to shareholders.
FWRG struggles with subpar profitability and pressured margins. However, this is severely offset by a highly leveraged balance sheet (Debt/EBITDA > 4.0x) and elevated financial risk.
The company is driving exceptional top-line expansion (18.7% 3Y CAGR) paired with highly explosive earnings growth (41.3% EPS 3Y CAGR). However, profitability remains a major concern with severely compressed operating margins (2.3%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $331.0M | +20.3% | +18.7% | +29.0% | — | |
| EBITDA | $24.1M | — | +28.6% | — | — | |
| Net Income | -$2.7M | +2.7% | +41.2% | — | — | |
| EPS (Diluted) | $-0.04 | +3.3% | +41.3% | — | — | |
| Free Cash Flow | $5.1M | -152.5% | -328.8% | +7.3% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 35.1% | 37.5% | 30.4% | 25.2% |
| Operating Margin | 2.3% | 3.7% | 3.4% | -0.5% |
| Net Margin | 1.4% | 2.1% | 1.4% | -2.7% |
| FCF Margin | -0.7% | -0.8% | 0.4% | -2.7% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $-0.02 | $-0.04 | -100.0% | ||
| Q1'26 | $0.08 | $0.24 | +200.0% | ||
| Q4'25 | $0.08 | $0.05 | -37.5% | ||
| Q3'25 | $0.07 | $0.03 | -57.1% | ||
| Q2'25 | $0.04 | $-0.01 | -125.0% | ||
| Q1'25 | $0.02 | $0.01 | -50.0% | ||
| Q4'24 | $0.05 | $0.03 | -40.0% | ||
| Q3'24 | $0.12 | $0.14 | +16.7% |
Total return is -22.9% (1Y), lagging the benchmark by -47.9%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -23.2% | -32.5% | — |
| 1Y | -22.9% | -47.9% | — |
| 3YCAGR | -10.0% | -30.4% | — |
| 5YCAGR | -11.8% | -24.8% | — |
| 10YCAGR | -6.1% | -20.0% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about First Watch Restaurant Group, Inc. (FWRG) valuation, health, and returns.
Based on peer relative multiples, First Watch Restaurant Group, Inc. appears Expensive versus peers compared to industry peers.
First Watch Restaurant Group, Inc. has multiple valuation anchors: Peer Relative Fair Value: $6.46 | Wall Street Analyst Target: $17.33 (implying +46.7% upside). A convergence of these signals offers higher conviction.
First Watch Restaurant Group, Inc. displays weak financial health with a composite quality score of 35/100, supported by a Altman Z-Score of 0.4 (distress zone), Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 1.9%.
First Watch Restaurant Group, Inc. does not return material capital to shareholders via dividends or share repurchases, electing to retain earnings to fund internal growth.
First Watch Restaurant Group, Inc.'s current growth trajectory is Stable. The company achieved +20.3% 1Y revenue growth and +3.3% 1Y EPS growth, compared to its 3Y revenue CAGR of +18.7%.
Wall Street consensus is Buy based on 15 analysts, beating EPS expectations in 50% of recent quarters with a -1-quarter streak. The consensus price target represents a +46.7% change from current levels.
Investment risks for First Watch Restaurant Group, Inc. include: -47.3% 1-year max drawdown, elevated distress risk. Volatility risk is characterized by a beta of 1.16x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.