Is First Watch Restaurant Group, Inc. overvalued or undervalued?

As of 5 August 2025, the valuation grade for First Watch Restaurant Group, Inc. has moved from very expensive to fair. The company appears to be fairly valued based on its current metrics, with a P/E ratio of 54, a Price to Book Value of 1.53, and an EV to EBITDA of 11.90. In comparison, Brinker International, Inc. is considered attractive with a P/E of 26.05, while Shake Shack, Inc. is classified as very expensive with a P/E of 194.06.
Despite the recent grade change indicating a more favorable valuation, First Watch has underperformed relative to the S&P 500 in the short term, with a year-to-date return of -11.07% compared to the S&P 500's 12.22%. This suggests that while the company may be fairly valued, its stock performance has lagged behind broader market trends.