WW Worldwide Inc. had its worst month ever in January, reversing the wellness firm’s progress because it mentioned in March it was coming into the rising marketplace for a brand new class of weight-loss medication.
WW, higher often called WeightWatchers, fell 6.1% on Wednesday, bringing its decline for the month to 57% amid rising competitors and considerations about subscriber development. The most recent drop got here as a part of a broad market decline Wednesday after Federal Reserve Chairman Jerome Powell indicated officers aren’t dashing to chop charges.
The efficiency marks a stark reversal from 2023. The inventory posted its greatest single-day achieve since 2015 on March 7, after WW struck a deal for telehealth weight problems drug supplier Sequence. The thrill surrounding the acquisition and its potential to remodel WW’s enterprise noticed its shares rise 127% final yr.
A serious supply of January’s weak spot got here early within the month when Eli Lilly and Co. launched an initiative to promote weight reduction medication on to the general public, threatening a key development space for WW.
Some Wall Road analysts are involved about attainable indicators of declining demand for unemployment insurance policy.
At Craig-Hallum Capital Group LLC, analyst Alex Fuhrman warned this week that client curiosity in conventional weight-loss corporations is “considerably decrease” than final yr. Downloads of the WW app on Android gadgets and internet site visitors for the corporate declined in early 2024, Fuhrman mentioned in a analysis word. He famous equally weak tendencies for weight-loss startup Noom Inc.
It’s honest to say that Linda Bolton Weiser of DA Davidson & Co. mentioned WW warned in December that third-party information might trigger noise because of Sequence’s integration into its app.
“Buyers are very shocked by the app obtain information,” she says. “The development appears to have modified, however alternatively the information could also be distorted.”
She mentioned WW’s subscriber replace with fourth-quarter earnings in March will make clear whether or not the app obtain information precisely displays current tendencies.
“Long run, WeightWatchers continues to be effectively positioned to be one to seize important market share within the business,” she mentioned. “They’ve model worth, when nobody else actually does within the weight reduction area.”
WW has 4 purchase scores, three maintain and one promote scores amongst analysts tracked by Bloomberg. The common analyst value goal of $11 implies a return potential of roughly 191% over the following twelve months.