First Watch Restaurant Group (NASDAQ:FWRG) and Starbucks (NASDAQ:SBUX) Financial Review

Starbucks (NASDAQ:SBUX) and First Watch Restaurant Group (NASDAQ:FWRG) are both retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Profitability

This table compares Starbucks and First Watch Restaurant Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Starbucks	3.63%	-28.66%	7.03%
First Watch Restaurant Group	0.42%	0.83%	0.31%

Volatility and Risk

Starbucks has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, First Watch Restaurant Group has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Starbucks and First Watch Restaurant Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Starbucks	2	7	19	0	2.61
First Watch Restaurant Group	1	1	8	1	2.82

Starbucks currently has a consensus target price of $104.74, indicating a potential upside of 13.91%. First Watch Restaurant Group has a consensus target price of $20.91, indicating a potential upside of 30.76%. Given First Watch Restaurant Group’s stronger consensus rating and higher probable upside, analysts plainly believe First Watch Restaurant Group is more favorable than Starbucks.

Earnings & Valuation

This table compares Starbucks and First Watch Restaurant Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Starbucks	$37.18 billion	2.82	$1.86 billion	$1.21	75.99
First Watch Restaurant Group	$1.02 billion	0.96	$18.92 million	$0.08	199.88

Starbucks has higher revenue and earnings than First Watch Restaurant Group. Starbucks is trading at a lower price-to-earnings ratio than First Watch Restaurant Group, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

72.3% of Starbucks shares are owned by institutional investors. Comparatively, 96.1% of First Watch Restaurant Group shares are owned by institutional investors. 0.0% of Starbucks shares are owned by insiders. Comparatively, 6.0% of First Watch Restaurant Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Starbucks beats First Watch Restaurant Group on 8 of the 15 factors compared between the two stocks.

About Starbucks

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. The company offers its products under the Starbucks Coffee, Teavana, Seattle’s Best Coffee, Ethos, Starbucks Reserve, and Princi brands. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.

About First Watch Restaurant Group

First Watch Restaurant Group, Inc., through its subsidiaries, operates and franchises restaurants under the First Watch trade name in the United States. The company was formerly known as AI Fresh Super Holdco, Inc. and changed its name to First Watch Restaurant Group, Inc. in December 2019. First Watch Restaurant Group, Inc. was founded in 1983 and is based in Bradenton, Florida.