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

As of 17 October 2025, the valuation grade for First Watch Restaurant Group, Inc. moved from expensive to fair. The company appears 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. has a more attractive P/E of 26.05, while Shake Shack, Inc. is categorized as very expensive with a P/E of 194.06.
Despite its fair valuation, First Watch has underperformed relative to the S&P 500 in the year-to-date period, with a return of -3.71% compared to the S&P 500's 13.30%. However, over the past three years, it has delivered a return of 11.24%, significantly lagging behind the S&P 500's impressive 81.19% return, indicating potential challenges ahead.