First Watch Restaurant Group Inc. Common Stock (FWRG)

FairStock Score: 41/100 — MIXED

Key Financials

Strengths

• Revenue growth of 20.1% demonstrates strong top-line momentum
• Established organization with 17,500 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($8) with negative 62% margin of safety—limited downside protection
• Altman Z-Score of 0.5 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

First Watch Restaurant Group Inc. Common Stock is a micro-cap consumer cyclical company valued at $842 million. The business generates $1.2 billion in annual revenue with a 1.2% net margin. From a quality standpoint, First shows distressed Altman Z-Score of 0.5 warrants caution and modest 3% ROE. On valuation, the stock is commanding a steep 42.6x multiple, with trades above its Graham Number with a negative 62% margin. Growth dynamics show revenue growing at 20.1% and profit growth of 2069.4%. Our composite FairStock Score of 41/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

First's 20% revenue growth trajectory could accelerate as it captures additional market share in the consumer cyclical sector. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

At 43x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer