First Watch Restaurant Group, Inc. (FWRG) stock analysis

P/E below its 5-year median

First Watch Restaurant's P/E of 44.6 is below its own 5-year median of 64.5.

P/E above the industry

First Watch Restaurant's P/E of 44.6 is above the Eating and Drinking Places median of 27.8.

EV/EBITDA below its 5-year median

First Watch Restaurant's EV/EBITDA of 9.6 is below its 5-year median of 15.1.

P/B below the industry

First Watch Restaurant's price-to-book of 1.26 is below the Eating and Drinking Places median of 3.11.

Trading below fair value

The share price of $12.94 is below our fair value estimate of $16.11.

Margin of safety under 20%

The price is 19.7% below fair value, less than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 18.7% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 41.3% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 19.3% over the last twelve months; the Eating and Drinking Places median is 5.9%.

Guidance lowered

First Watch Restaurant lowered its Fiscal Year 2026 Capital expenditures outlook on Nov 3, 2026.

Gross margin trend

This company does not report gross profit.

Return on equity under 15%

Return on equity was 2.9% over the last twelve months and averaged 2.4% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 3.2%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

First Watch Restaurant's return on equity of 2.9% is below the Eating and Drinking Places median of 7.9%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was 1.4% over the last twelve months, against a 5-year average of 1.4%.

Net margin below the industry

First Watch Restaurant's net margin of 1.4% is below the Eating and Drinking Places median of 1.9%.

High debt

Debt is 46.1% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 90.4% five years ago to 46.1%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 43.8% of total debt.

Interest not well covered

Operating income covers interest expense 1.5 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.27 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.07; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

First Watch Restaurant has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.