11 Most Promising Restaurant Stocks to Buy According to Hedge Funds

7. First Watch Restaurant Group, Inc. (NASDAQ:FWRG)

First Watch Restaurant Group, Inc. (NASDAQ:FWRG) is one of the most promising stocks on our list.

TheFly reported on February 25 that BofA Securities reduced its price target for FWRG from $24 to $20 while keeping a Neutral rating on the stock. Due to a weaker increase in same-restaurant sales, the firm lowered its first-quarter and full-year 2026 EBITDA expectations. The firm also said that decreased revenue and adjusted EBITDA are anticipated as a result of lower pricing levels, which led to the revised projection.

First Watch Restaurant Group, Inc. (NASDAQ:FWRG) announced its fourth-quarter and full-year 2025 financial results on February 24. These results covered the 52-week period that ended on December 28, 2025. With same-restaurant sales up 3.6% and overall revenues up 20.3% to $1.2 billion, the company hailed a successful year. Adjusted EBITDA reached $120.9 million, while net income increased marginally to $19.4 million. Revenue for the fourth quarter was $316.4 million, up 20.2% from the same period last year. Net income was $15.2 million, and adjusted EBITDA was $33.7 million.

In 2025, FWRG added 64 new eateries, increasing the number of its system-wide locations to 633 in 32 states. The firm anticipates 59–63 new restaurant openings, 1%–3% rise in same-restaurant sales, a 12%–14% increase in total revenue, adjusted EBITDA of $132 million to $140 million, and capital expenditures of $150 million to $160 million in fiscal 2026.

First Watch Restaurant Group, Inc. (NASDAQ:FWRG) is a U.S.-based daytime dining restaurant chain specializing in breakfast, brunch, and lunch. Known for fresh ingredients, made-to-order dishes, and a health-conscious menu, the company emphasizes quality, value, and a welcoming dining experience across its nationwide locations.