10 Best Restaurant Stocks with Highest Upside

We look at 10 restaurant stocks with the highest analyst-implied upside potential amid shifting consumer spending and uneven industry performance.

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

Analyst Upside: 36.43%

Number of Hedge Fund Holders: 27

First Watch Restaurant Group, Inc. (NASDAQ:FWRG) continues expanding its breakfast, brunch, and lunch restaurant network despite a challenging consumer spending environment. Its investment case rests on the combination of restaurant development and improvements in earnings, although recent traffic figures suggest that growth at existing locations remains relatively modest.

In the third quarter of 2026, total revenue increased 10.7% to $349.9 million, while adjusted EBITDA rose to $39.7 million from $34.1 million a year earlier. First Watch opened 16 systemwide restaurants in 11 states during the quarter, bringing its network to 681 locations across 33 states.

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The underlying sales figures provide a more measured picture. Same-restaurant sales increased 1%, but customer traffic declined 1.9%. Restaurant-level operating profit margin also narrowed slightly to 19.4% from 19.7%. Nevertheless, management maintained its expansion plans and updated its fiscal 2026 outlook to approximately 60 net new systemwide restaurants and $136 million in adjusted EBITDA.

For investors, the distinction between new-unit growth and existing-restaurant performance is particularly important. First Watch has continued growing total revenue and adjusted earnings, but stronger customer traffic would provide additional support for its expansion strategy and restaurant profitability.