FWRG - First Watch: Great Restaurant Concept But An Equal Valuation

2024-02-21 06:20:12 ET

Summary

• First Watch has a great restaurant concept and continues to grow the restaurant footprint & same-restaurant sales impressively.
• Currently, the company has quite thin profitability and cash flows due to growth investments, but I believe that gradual increases in both are bound to happen.
• The current valuation doesn't support a very attractive investment, despite great growth potential.

First Watch Restaurant Group (FWRG) operates and franchises restaurants under the First Watch brand name. After Q3, the company operated a total of 402 restaurants, on top of which 103 First Watch restaurants are operated as franchisees totaling 505 system-wide restaurants. First Watch plans to grow the store concept into a more prominent player in the industry with potential for 2200 restaurants communicated in First Watch's Q3 presentation ....

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