We recently compiled a list of the 10 High Growth Restaurant Stocks For 2025. In this article, we are going to take a look at where First Watch Restaurant Group Inc. (NASDAQ:FWRG) stands against the other high growth restaurant stocks.
Morgan Stanley recently published a report on the restaurant industry, suggesting that the tough environment that the industry is currently facing may ease out in 2025, though only modestly. Restaurants will have to continue working on providing value meals to consumers who continue to struggle to balance their income and expenses.
A balanced job market could help keep labor costs steady. However, a political campaign against immigration could be a potential headwind for the industry. A growing emphasis on robotics to improve efficiency and customer service could also play a key role in the industry’s development this year, though it is too early to determine the financial implications of these moves.
We decided to shortlist a few stocks that we believe could benefit from an improving industry environment in 2025. To come up with the list of 10 restaurant stocks with a high growth rate, we only considered stocks that have grown by more than 15% in the last 5 years or since IPO and have a market cap of at least $1 billion.
A busy restaurant kitchen with a chef carefully plating a meal.
First Watch Restaurant Group Inc. (NASDAQ:FWRG)
First Watch Restaurant Group Inc. runs a daytime-only restaurant chain under the First Watch Trade name and serves brunch, lunch, and breakfast. Its stock is down 10% for the year and currently trading below its IPO price. This could change once the company resolves its traffic problem, which isn’t entirely of its own making. It is an industry-wide issue expected to ease in 2025.
The growth rate of 24% may not be sustainable for FWRG but this doesn’t undermine the company’s growth story in any way. This month, the company announced that it had achieved its target of 25 new store openings in Q4, despite minor delays at some locations. More openings are expected this year as the CEO Chris Tomasso updated the company’s shareholders:
In 2025, we plan to build on our leading position in the Daytime Dining category through a robust real estate pipeline and with our talented team committed to driving our long-term growth strategy.
Overall FWRG ranks 5th on our list of the high growth restaurant stocks for 2025. While we acknowledge the potential of FWRG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as FWRG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
