What Happened?
Shares of breakfast restaurant chain First Watch Restaurant Group (NASDAQ: FWRG) fell 5.3% in the morning session after a major shareholder, Advent International, L.P., disclosed its intention to sell a significant block of shares.
According to a regulatory filing on September 8, the insider plans to sell 4.4 million shares of common stock, with an approximate total market value of $77.75 million. Large sales by significant insiders or major investment firms can sometimes worry investors, leading to downward pressure on the stock price. This type of move can be interpreted as a potential lack of confidence in the company's short-term prospects, or it could simply be a portfolio rebalancing action by the investment firm.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy First Watch? Access our full analysis report here, it’s free.
What Is The Market Telling Us
First Watch’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 19.4% on the news that the company reported weak first quarter 2025 results which featured a significant miss on full-year EBITDA guidance and EBITDA that fell short of Wall Street's estimates. While revenue grew 16% and met estimates, same-restaurant sales barely rose, and traffic actually declined slightly, underscoring a more cautious consumer and softer in-store trends. Overall, this was a weaker quarter.
First Watch is down 9.1% since the beginning of the year, and at $17.08 per share, it is trading 23.2% 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 $771.80.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
