WW International Inc (NASDAQ: WW) fell hard from a $102 all-time high struck in 2018. Its one-time 206% price-to-earnings premium contracted to a present-day 7% discount. At this point, one analyst considers WW ripe for the picking.
The WW Rating
Goldman Sachs analyst Jason English upgraded WW International to Buy and raised his price target from $26 to $48.
The WW Thesis
Considering Weight Watcher’s cyclical fundamental and stock-price history, English anticipates a series of positives for the stock — namely, an inflection in subscriber growth that triggers positive estimate revisions and stock re-ratings.
“Positive inflections in these cycles have typically been accompanied by multifaceted layers of new news to engage the consumer,” he wrote in a report. “We believe these conditions are currently being met by WW’s new program news (myWW), aggressive TV and social media campaigns and the co-branded Oprah 2020 Vision tour.”
According to Google Trends and downloads of the Sensor Tower App, these marketing efforts have increased interest. English expects subscriber growth to to accelerate beyond 14% in 2020.
Goldman Sachs forecasts earnings upside and higher valuation ratings, particularly as the stock trades at a discount.
WW Price Action
At time of publication, WW shares traded up 7.8% at $36.24.