First Watch Restaurant Group, Inc. Just Reported A Surprise Loss: Here's What Analysts Think Will Happen Next

There's been a notable change in appetite for First Watch Restaurant Group, Inc. (NASDAQ:FWRG) shares in the week since its first-quarter report, with the stock down 13% to US$15.99. Things were not great overall, with a surprise (statutory) loss of US$0.01 per share on revenues of US$282m, even though the analysts had been expecting a profit. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the most recent consensus for First Watch Restaurant Group from ten analysts is for revenues of US$1.21b in 2025. If met, it would imply a decent 14% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to decrease 9.9% to US$0.16 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.21b and earnings per share (EPS) of US$0.33 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

View our latest analysis for First Watch Restaurant Group

The average price target fell 9.5% to US$21.55, with reduced earnings forecasts clearly tied to a lower valuation estimate. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values First Watch Restaurant Group at US$25.00 per share, while the most bearish prices it at US$17.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of First Watch Restaurant Group'shistorical trends, as the 19% annualised revenue growth to the end of 2025 is roughly in line with the 17% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 9.8% annually. So although First Watch Restaurant Group is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of First Watch Restaurant Group's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for First Watch Restaurant Group going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for First Watch Restaurant Group you should know about.

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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.