First Watch Restaurant Group, Inc. - Common Stock (FWRG)

The market didn't seem to like First Watch Restaurant Group's 2026 guidance, but the stock's future remains interesting.

Shares of breakfast restaurant chain First Watch Restaurant Group (NASDAQ:FWRG) fell 10.5% in the morning session after the company reported mixed fourth-quarter results, where a significant earnings beat was overshadowed by a slight miss on adjusted EBITDA and a weak forecast for the upcoming year. 

First Watch (FWRG) Q4 2025 Earnings Transcript

Breakfast restaurant chain First Watch Restaurant Group (NASDAQ:FWRG) met Wall Street’s revenue expectations in Q4 CY2025, with sales up 20.2% year on year to $316.4 million. Its GAAP profit of $0.24 per share was significantly above analysts’ consensus estimates.

A number of stocks fell in the afternoon session after the Trump administration's announcement of new global tariffs, reignited trade policy uncertainty. The move came swiftly after the Supreme Court ruled the previous week that the president could not use the International Emergency Economic Powers Act (IEEPA) for such duties, a decision that had initially sent markets higher. However, the administration invoked a different authority, the Trade Act of 1974, to impose a 15% global tariff for up to 150 days. The rapid reimposition of trade barriers creates significant uncertainty for companies across multiple sectors that depend on international supply chains and global trade. Investors are now weighing the potential impact of these new duties on corporate earnings and broader economic activity.

Breakfast restaurant chain First Watch Restaurant Group (NASDAQ:FWRG) will be announcing earnings results this Tuesday morning. Here’s what you need to know.

Wall Street has set ambitious price targets for the stocks in this article. While this suggests attractive upside potential, it’s important to remain skeptical because analysts face institutional pressures that can sometimes lead to overly optimistic forecasts.

Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages. Just because a business is in the green today doesn’t mean it will thrive tomorrow.

Growth is oxygen. But when it evaporates, the consequences can be severe - ask anyone who bought Cisco in the Dot-Com Bubble or newer investors who lived through the 2020 to 2022 COVID cycle.

"You get what you pay for" often applies to expensive stocks with best-in-class business models and execution. While their quality can sometimes justify the premium, they typically experience elevated volatility during market downturns when expectations change.

Since July 2025, First Watch has been in a holding pattern, floating around $16.50. The stock also fell short of the S&P 500’s 11.5% gain during that period.

Shares of breakfast restaurant chain First Watch Restaurant Group (NASDAQ:FWRG) jumped 3.5% in the afternoon session after the company announced strong preliminary operational results for its 2025 fiscal year, including record new restaurant openings and positive sales growth. 

Stocks in the $10-50 range offer a sweet spot between affordability and stability as they’re typically more established than penny stocks. But their headline prices don’t guarantee quality, and investors should exercise caution as some have shaky business models.

Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names. But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses.

Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.

Advent International sold the majority of its position in First Watch Restaurant Group, which was previously its fourth-largest holding.

Expensive stocks typically earn their valuations through superior growth rates that other companies simply can’t match. The flip side though is that these lofty expectations make them particularly susceptible to drawdowns when market sentiment shifts.

Wrapping up Q3 earnings, we look at the numbers and key takeaways for the sit-down dining stocks, including First Watch (NASDAQ:FWRG) and its peers.

Growth boosts valuation multiples, but it doesn’t always last forever. Companies that cannot maintain it are often penalized with large declines in market value, a lesson ingrained in investors who lost money in tech stocks during 2022.

Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at First Watch (NASDAQ:FWRG) and its peers.

Shares of breakfast restaurant chain First Watch Restaurant Group (NASDAQ:FWRG) jumped 10.6% in the morning session after the company reported strong third-quarter results that beat revenue expectations and offered an upbeat full-year outlook. The restaurant chain's total revenues grew 25.6% year on year to $316 million, surpassing analyst estimates. This growth was driven by a 7.1% increase in same-store sales and the opening of new restaurants. First Watch's earnings per share (EPS) increased to $0.05 from $0.03 in the same quarter last year. While this EPS figure was $0.02 below analysts' predictions, investors seemingly focused on the strong sales performance. Adding to the positive sentiment, the company's full-year adjusted EBITDA guidance of $123 million at the midpoint was above Wall Street's estimates, signaling confidence in its continued performance. Adjusted EBITDA is a key measure of profitability.

First Watch's Q3 2025 earnings show a revenue beat but an EPS miss. The stock faced pressure despite strong same-store sales growth of 7.1% and aggressive restaurant expansion.

Breakfast restaurant chain First Watch Restaurant Group (NASDAQ:FWRG) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 25.6% year on year to $316 million. Its GAAP profit of $0.05 per share was $0.02 below analysts’ consensus estimates.