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1. Company Snapshot

1.a. 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 was formerly known as AI Fresh Super Holdco, Inc.and changed its name to First Watch Restaurant Group, Inc.in December 2019.


First Watch Restaurant Group, Inc.was founded in 1983 and is headquartered in Bradenton, Florida.

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1.b. Last Insights on FWRG

First Watch Restaurant Group, Inc.'s recent performance was negatively impacted by its Q3 earnings miss, with quarterly earnings of $0.05 per share, falling short of the Zacks Consensus Estimate of $0.08 per share. The company's secondary offering of 5,289,784 shares of common stock by certain funds managed by Advent International, L.P. may have also contributed to the stock's underperformance. Additionally, while the company is rapidly growing, its shift from franchised to company-owned locations has temporarily pressured margins due to higher costs.

1.c. Company Highlights

2. First Watch Restaurant Group's Q3 2025 Earnings: A Strong Performance

First Watch Restaurant Group reported a robust financial performance for the third quarter of 2025, with total revenue increasing by 25.6% to $316 million, driven by a 7.1% same-restaurant sales growth and the contribution of 167 non-comp restaurants. The restaurant-level operating profit margin expanded to 19.7%, an 80 basis point improvement from the same period last year. Earnings per share (EPS) came in at $0.05, below analyst estimates of $0.08.

Publication Date: Nov -26

📋 Highlights
  • 25.6% Revenue Growth:: Total Q3 revenue surged 25.6% YoY to $316M, driven by 7.1% same-restaurant sales growth and 167 non-comp restaurants.
  • 19.7% Operating Margin Expansion:: Restaurant-level operating profit margins improved 80 bps to 19.7% in Q3 2025 vs. prior year.
  • 11% System-Wide Growth Target:: On pace for 63–64 new restaurants in 2025, expanding locations from 428 to 620 and driving 20–21% annual revenue growth.
  • 35% Cash-on-Cash Returns:: Sustained high-return capital investments delivered average 35% returns, with adjusted EBITDA doubling since 2024.

Operational Highlights

The company's aggressive unit expansion strategy has been a key driver of its success, with 21 system-wide restaurants opened across 14 states during the third quarter. The second-generation site strategy has been particularly successful, with 9 out of 10 of the highest opening week sales in company history achieved in restaurants opened within the last 12 months. As Chris Tomasso, CEO and President, noted, "Our new restaurants outperform the core, with some record-setting locations."

Growth Prospects

First Watch Restaurant Group is on pace to meet its target of 63 to 64 new restaurant openings for the year, representing nearly 11% system-wide growth in 2025. The company is confident in its expansion strategy for 2026 and beyond, with a healthy real estate and people pipeline. Analysts estimate revenue growth of 15.3% for the next year.

Valuation Metrics

To understand what's priced into First Watch Restaurant Group's stock, we can look at its valuation metrics. The company's P/S Ratio is 0.93, EV/EBITDA is 23.15, and ROE is 1.49%. These metrics suggest that the stock may be trading at a premium, but the company's strong growth prospects and expanding margins may justify this valuation.

Marketing and Customer Trends

The company is targeting social and digital marketing channels, which have been successful in driving traffic and sales. First Watch Restaurant Group is also seeing consistent results across geographies, with no variation in market response. As Matt Eisenacher noted, "We're tracking people and staying top of mind for category users." The company's efforts to innovate and improve the guest experience are also yielding positive results, with weekday breakfast being the standout daypart in Q3 growth.

3. NewsRoom

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First Watch Restaurant Group, Inc. (NASDAQ:FWRG) Receives Average Recommendation of “Moderate Buy” from Brokerages

Dec -04

Source: defenseworld.net

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First Watch Restaurant Group, Inc. to Participate in Two December Investor Conferences

Nov -25

Source: globenewswire.com

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First Watch Restaurant Group, Inc. to Participate at the Stephens Annual Investment Conference on November 18-19, 2025

Nov -13

Source: globenewswire.com

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First Watch Restaurant Group, Inc. Announces Secondary Offering of Common Stock

Nov -05

Source: globenewswire.com

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First Watch Restaurant Group, Inc. (FWRG) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

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First Watch Restaurant Group (FWRG) Q3 Earnings: How Key Metrics Compare to Wall Street Estimates

Nov -04

Source: zacks.com

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First Watch Restaurant Group, Inc. (FWRG) Q3 Earnings Lag Estimates

Nov -04

Source: zacks.com

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First Watch Restaurant Group Is Surprisingly Tasty

Nov -01

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.44%)

6. Segments

Restaurant - In-restaurant Dining

Expected Growth: 12%

First Watch Restaurant Group's 12% in-restaurant dining growth is driven by increasing brand awareness, menu innovation, and enhanced customer experience. Additionally, strategic marketing efforts, loyalty program expansion, and optimized menu pricing contribute to the growth. Furthermore, the company's focus on breakfast and brunch offerings, which are less competitive and have higher margins, also supports the segment's growth.

Restaurant - Third-party Delivery

Expected Growth: 18%

Strong demand for convenience, increasing adoption of online ordering, and strategic partnerships with third-party delivery providers drive growth. First Watch's breakfast-focused menu resonates with consumers seeking healthier, portable options. Expansion into new markets, improved operational efficiency, and investments in digital infrastructure further support the 18% growth.

Restaurant - Take-out

Expected Growth: 10%

First Watch Restaurant Group, Inc.'s 10% take-out growth driven by increasing demand for convenience, health-conscious consumers seeking breakfast and brunch options, and effective marketing strategies. Additionally, the rise of third-party delivery platforms and the company's own online ordering system contribute to the growth. Furthermore, menu innovation and loyalty programs also play a key role in driving sales.

Franchise - Royalty and System Fund Contributions

Expected Growth: 11%

First Watch Restaurant Group, Inc.'s 11% growth in Franchise - Royalty and System Fund Contributions is driven by increasing same-store sales, expansion of existing franchisee base, and strategic partnerships. Additionally, the brand's focus on breakfast and brunch, a growing demand for convenience, and effective marketing strategies contribute to this growth.

Franchise - Business Combinations

Expected Growth: 13%

First Watch Restaurant Group's 13% growth in Franchise - Business Combinations is driven by increasing demand for breakfast and brunch options, successful franchisee partnerships, strategic site selection, and effective marketing campaigns. Additionally, the brand's focus on quality, freshness, and customer experience has led to strong same-store sales growth and attractive unit economics, fueling further expansion.

Franchise - Initial Fees

Expected Growth: 9%

First Watch Restaurant Group, Inc.'s 9% growth in Initial Fees from Franchise is driven by increasing demand for breakfast and brunch options, expansion into new markets, and strategic partnerships. Additionally, the brand's focus on quality, freshness, and customer experience has led to higher royalties from existing franchisees, contributing to the growth.

7. Detailed Products

Breakfast Items

First Watch Restaurant Group, Inc. offers a variety of breakfast items, including omelets, pancakes, waffles, eggs benedict, and breakfast sandwiches.

Lunch Items

The company's lunch menu features a range of sandwiches, salads, soups, and wraps, all made with fresh, seasonal ingredients.

Beverages

First Watch Restaurant Group, Inc. offers a variety of specialty coffee drinks, teas, and juices, as well as a selection of wine and beer.

Catering Services

The company offers catering services for events and meetings, providing a range of menu items and customized solutions.

Online Ordering and Delivery

First Watch Restaurant Group, Inc. offers online ordering and delivery services, allowing customers to enjoy their favorite menu items from the comfort of their own homes.

8. First Watch Restaurant Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

First Watch Restaurant Group, Inc. faces moderate threat from substitutes as customers have various options for breakfast and brunch, but the company's unique menu offerings and high-quality ingredients help to differentiate it from competitors.

Bargaining Power Of Customers

Customers have limited bargaining power due to the fragmented nature of the breakfast and brunch market, and First Watch's strong brand reputation and customer loyalty.

Bargaining Power Of Suppliers

Suppliers have limited bargaining power due to the company's large scale of operations and ability to negotiate favorable prices for ingredients and supplies.

Threat Of New Entrants

The threat of new entrants is moderate due to the relatively low barriers to entry in the breakfast and brunch market, but First Watch's established brand and operational efficiencies make it challenging for new entrants to compete.

Intensity Of Rivalry

The intensity of rivalry is high in the breakfast and brunch market, with many established players competing for market share, but First Watch's unique menu offerings and strong brand reputation help to differentiate it from competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 51.96%
Debt Cost 3.95%
Equity Weight 48.04%
Equity Cost 9.31%
WACC 6.53%
Leverage 108.14%

11. Quality Control: First Watch Restaurant Group, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
RAVE

A-Score: 5.3/10

Value: 5.0

Growth: 6.0

Quality: 8.8

Yield: 0.0

Momentum: 8.5

Volatility: 3.7

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Cannae Holdings

A-Score: 4.7/10

Value: 8.4

Growth: 1.6

Quality: 3.8

Yield: 3.0

Momentum: 4.0

Volatility: 7.7

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RCI Hospitality

A-Score: 4.3/10

Value: 7.6

Growth: 5.1

Quality: 5.2

Yield: 1.0

Momentum: 2.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
First Watch

A-Score: 4.2/10

Value: 4.7

Growth: 8.2

Quality: 2.2

Yield: 0.0

Momentum: 6.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Chuy's

A-Score: 3.6/10

Value: 4.1

Growth: 6.8

Quality: 3.9

Yield: 0.0

Momentum: 5.0

Volatility: 2.0

1-Year Total Return ->

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Denny's

A-Score: 3.5/10

Value: 8.5

Growth: 2.9

Quality: 4.3

Yield: 0.0

Momentum: 2.5

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

17.74$

Current Price

17.74$

Potential

-0.00%

Expected Cash-Flows