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    How Reliance on Lower Egg Costs Will Impact First Watch Restaurant Group (FWRG) Investors

    Simply Wall St·12/22/2025 14:13:34
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    • First Watch Restaurant Group recently reported a past “beat-and-raise” quarter, with headline growth flattered by a temporary benefit from lower egg prices rather than broad-based operational improvement.
    • Beneath the strong top-line print, concerns have emerged around weakening unit economics, slowing same-store sales, and franchisee exits, raising questions about the durability of its growth model.
    • Next, we’ll examine how this reliance on one-time commodity tailwinds could reshape First Watch’s previously growth-focused investment narrative.

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    First Watch Restaurant Group Investment Narrative Recap

    To own First Watch, you need to believe its daytime-only concept, new unit growth, and digital efforts can offset cost pressures and modest margins. The recent “beat-and-raise” quarter, boosted by lower egg prices and accompanied by signs of weaker unit economics, directly touches the key short term catalyst of same-store sales resilience and the main risk around structurally pressured restaurant-level profitability.

    Among recent announcements, the November 2025 guidance for roughly 4% same-restaurant sales growth and 20% to 21% total revenue growth stands out. Set against slowing underlying trends and rising costs, that outlook heightens the importance of whether new openings and off-premise channels can genuinely support the growth story beyond temporary commodity relief.

    Yet behind the headline growth, investors should be aware that weakening unit economics and franchisee exits could...

    Read the full narrative on First Watch Restaurant Group (it's free!)

    First Watch Restaurant Group's narrative projects $1.7 billion revenue and $33.8 million earnings by 2028.

    Uncover how First Watch Restaurant Group's forecasts yield a $22.00 fair value, a 36% upside to its current price.

    Exploring Other Perspectives

    FWRG 1-Year Stock Price Chart
    FWRG 1-Year Stock Price Chart

    Two fair value estimates from the Simply Wall St Community span a wide range, from about US$7.57 to US$22 per share. Given the recent reliance on falling egg prices and emerging margin pressures, readers may want to compare these views with alternative assessments of First Watch’s underlying earnings power.

    Explore 2 other fair value estimates on First Watch Restaurant Group - why the stock might be worth as much as 36% more than the current price!

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.