Analyst consensus target price for NASDAQ:FWRG has increased over the past year, suggesting potential growth despite current challenges.
The company is experiencing a decline in traffic and same-store sales, particularly in breakfast offerings, impacting its market position.
Financial stability concerns arise from negative free cash flow and increasing debt, despite a slight improvement in analyst sentiment.
First Watch Restaurant Group, Inc. (NASDAQ:FWRG) is a daytime dining restaurant chain known for its breakfast, brunch, and lunch offerings. The company has been expanding its footprint with new openings, contributing to its revenue growth. However, it faces competition from other casual dining chains and fast-casual restaurants, which impacts its market positioning.
The stock’s consensus target price has seen a positive shift over the past year. Last month, the average price target was $24, indicating a positive outlook from analysts. This suggests potential growth or positive developments within the company or industry. However, despite this optimism, First Watch is experiencing a decline in traffic and same-store sales, particularly in breakfast, as highlighted by Seeking Alpha.
In the last quarter, the average price target was $22.5, showing an upward trend in analyst expectations. This reflects increased confidence in the company’s performance or market position. However, the company is facing challenges with negative free cash flow and increasing debt, complicating its financial stability and ability to return capital to shareholders, as noted by Seeking Alpha.
A year ago, the average price target was $22.33, representing a steady increase and consistent improvement in analyst sentiment. Despite this, the stock is considered expensive, trading at high multiples with a PEG ratio that does not justify its growth prospects. As a result, it is viewed as a hold rather than a buy, with Goldman Sachs setting a price target of $21.
First Watch reported quarterly earnings of $0.01 per share, falling short of the Zacks Consensus Estimate of $0.02 per share. This performance also marks a decline from the $0.04 per share earnings reported in the same quarter last year. Despite the earnings miss, analysts remain cautiously optimistic, as reflected in the upward trend in the consensus price target.
