What Happened?

Shares of breakfast restaurant chain First Watch Restaurant Group (NASDAQ: FWRG) jumped 10.6% in the morning session after the company reported strong third-quarter results that beat revenue expectations and offered an upbeat full-year outlook. The restaurant chain's total revenues grew 25.6% year on year to $316 million, surpassing analyst estimates. This growth was driven by a 7.1% increase in same-store sales and the opening of new restaurants. First Watch's earnings per share (EPS) increased to $0.05 from $0.03 in the same quarter last year. While this EPS figure was $0.02 below analysts' predictions, investors seemingly focused on the strong sales performance. Adding to the positive sentiment, the company's full-year adjusted EBITDA guidance of $123 million at the midpoint was above Wall Street's estimates, signaling confidence in its continued performance. Adjusted EBITDA is a key measure of profitability.

Is now the time to buy First Watch? Access our full analysis report here.

What Is The Market Telling Us

First Watch’s shares are very volatile and have had 28 moves greater than 5% over the last year. But moves this big are rare even for First Watch and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 22 days ago when the stock gained 5.7% on the news that the broader market rallied amid signs that a trade conflict between the U.S. and China might not be as severe as initially feared. This move followed a rout in the previous trading session where investors' moods were hurt by escalating trade conflicts. However, sentiment reversed after U.S. officials, including the president, made comments that opened a door to a possible deal with China, offering some comfort to investors. The positive shift was reflected in the wider market, with the S&P 500 index rising by 1.1% and the tech-focused Nasdaq Composite index gaining 1.7%, lifting individual stocks along with them.

First Watch is down 4.6% since the beginning of the year, and at $17.92 per share, it is trading 19.4% below its 52-week high of $22.23 from February 2025. Investors who bought $1,000 worth of First Watch’s shares at the IPO in September 2021 would now be looking at an investment worth $809.76.

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