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WW International, Inc. (WW - Free Report) has been both a pandemic winner with its app gaining new subscribers, but also a pandemic loser as its studios have seen restrictions, including closures.
WW (formerly Weight Watchers) is a global wellness company with a leading commercial weight management program.
Through its digital app, it has expert coaches and engages with members in wellness areas focused on food, activity, mindset and sleep.
The company also continues to operate brick-and-mortar studios.
A Beat in the Fourth Quarter
On Feb 25, WW reported its fourth quarter results and beat the Zacks Consensus by $0.06. Earnings were $0.39 versus the consensus of $0.33.
It was the second earnings beat in a row.
At the end of the year, subscribers were up 4% year-over-year to 4.4 million, which was an all-time year-end high.
It's been adding subscribers to its digital app in droves all during 2020 and finished the year up 24% year-over-year to an end of the year high.
Adjusted gross margin, for the full year, rose year-over-year to 58.1%.
It faced numerous headwinds in 2020 due to COVID-19 including its studios being closed, or under other restrictions, in the United States and the UK.
However, the pandemic has forced the company to pivot to digital at a quicker pace than which it was already doing heading into 2020.
Analysts Cut 2021 and 2022 Earnings Estimates
The analysts got too bullish about 2021 even with a vaccine.
The UK has faced further lock downs this year.
As a result, the analysts have been cutting the full year estimates.
6 estimates were cut for 2021 in the last month, pushing the Zacks Consensus down to $1.84 from $2.24.
That's still earnings growth of 8.2%, however, as the company made $1.70 last year.
2 estimates were also cut for 2022 over the same period, which has pushed the Zacks Consensus Estimate down to $2.19 from $2.51.
That's further earnings growth of 19%.
Shares Are Up But Are Still Cheap
Despite the cutting of the full year earnings estimates by analysts, the shares have gained 29% year-to-date.
And they're still cheap, with a forward P/E of just 16.5.
By comparison, Peloton Interactive, Inc. (PTON - Free Report) , which also has a popular wellness app in addition to its bikes, has a forward P/E of 335.
Investors interested in this wellness space, might want to wait on the sidelines on WW until the earnings estimate revisions are going in the right direction.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
Bear of the Day: WW International (WW)
WW International, Inc. (WW - Free Report) has been both a pandemic winner with its app gaining new subscribers, but also a pandemic loser as its studios have seen restrictions, including closures.
WW (formerly Weight Watchers) is a global wellness company with a leading commercial weight management program.
Through its digital app, it has expert coaches and engages with members in wellness areas focused on food, activity, mindset and sleep.
The company also continues to operate brick-and-mortar studios.
A Beat in the Fourth Quarter
On Feb 25, WW reported its fourth quarter results and beat the Zacks Consensus by $0.06. Earnings were $0.39 versus the consensus of $0.33.
It was the second earnings beat in a row.
At the end of the year, subscribers were up 4% year-over-year to 4.4 million, which was an all-time year-end high.
It's been adding subscribers to its digital app in droves all during 2020 and finished the year up 24% year-over-year to an end of the year high.
Adjusted gross margin, for the full year, rose year-over-year to 58.1%.
It faced numerous headwinds in 2020 due to COVID-19 including its studios being closed, or under other restrictions, in the United States and the UK.
However, the pandemic has forced the company to pivot to digital at a quicker pace than which it was already doing heading into 2020.
Analysts Cut 2021 and 2022 Earnings Estimates
The analysts got too bullish about 2021 even with a vaccine.
The UK has faced further lock downs this year.
As a result, the analysts have been cutting the full year estimates.
6 estimates were cut for 2021 in the last month, pushing the Zacks Consensus down to $1.84 from $2.24.
That's still earnings growth of 8.2%, however, as the company made $1.70 last year.
2 estimates were also cut for 2022 over the same period, which has pushed the Zacks Consensus Estimate down to $2.19 from $2.51.
That's further earnings growth of 19%.
Shares Are Up But Are Still Cheap
Despite the cutting of the full year earnings estimates by analysts, the shares have gained 29% year-to-date.
And they're still cheap, with a forward P/E of just 16.5.
By comparison, Peloton Interactive, Inc. (PTON - Free Report) , which also has a popular wellness app in addition to its bikes, has a forward P/E of 335.
Investors interested in this wellness space, might want to wait on the sidelines on WW until the earnings estimate revisions are going in the right direction.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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