Those who invested in First Watch Restaurant Group (NASDAQ:FWRG) a year ago are up 14%

The simplest way to invest in stocks is to buy exchange traded funds. But if you pick the right individual stocks, you could make more than that. For example, the First Watch Restaurant Group, Inc. (NASDAQ:FWRG) share price is up 14% in the last 1 year, clearly besting the market return of around 9.7% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! We'll need to follow First Watch Restaurant Group for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

So let's assess the underlying fundamentals over the last 1 year and see if they've moved in lock-step with shareholder returns.

Check out our latest analysis for First Watch Restaurant Group

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the last year First Watch Restaurant Group grew its earnings per share (EPS) by 126%. It's fair to say that the share price gain of 14% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about First Watch Restaurant Group as it was before. This could be an opportunity. Of course, with a P/E ratio of 93.61, the market remains optimistic.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We know that First Watch Restaurant Group has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

A Different Perspective

It's nice to see that First Watch Restaurant Group shareholders have gained 14% over the last year. A substantial portion of that gain has come in the last three months, with the stock up 5.5% in that time. This suggests the company is continuing to win over new investors. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with First Watch Restaurant Group , and understanding them should be part of your investment process.

But note: First Watch Restaurant Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here