Shares of First Watch Restaurant Group (FWRG, Financial) experienced a decline of 3.04% today, with the stock price settling at $17.54. This movement comes on the heels of the company releasing mixed fourth-quarter results, where earnings per share (EPS) fell short of expectations and the full-year EBITDA guidance was slightly below Wall Street estimates.
First Watch Restaurant Group (FWRG, Financial) is a notable player in the daytime restaurant segment, focusing on offering made-to-order breakfast, brunch, and lunch using fresh ingredients. Despite robust revenue growth of 17.3% over the past year, the company is currently facing some financial challenges. The Altman Z-score indicates distress, suggesting a potential bankruptcy risk in the next two years with a score of 1.4. Additionally, the company's Return on Invested Capital (ROIC) is less than its Weighted Average Cost of Capital (WACC), signaling potential inefficiencies in capital utilization.
On the valuation front, First Watch Restaurant Group's price-to-earnings (P/E) ratio stands at 53.15, which is significantly higher than the industry median of 23.05. The company exhibits a price-to-book (P/B) ratio of 1.8, while its enterprise value (EV) is reported at $1.82 billion. However, the company's GF Value indicates that it is "Modestly Undervalued," with a GF Value of 22.75. For more details, you can refer to the GF Value page.
While First Watch Restaurant Group (FWRG, Financial) faces near-term hurdles, such as cash flow challenges evidenced by a free cash flow yield of -0.39%, it remains a part of the dynamic restaurants industry within the Consumer Cyclical sector. Investors should weigh these factors alongside the company's growth potential and industry standing before making investment decisions.
