Back to top

Momentum

Weight Watchers International (WTW - Snapshot Report) continues to defy the skeptics, recently hitting a new all-time high after reporting a 12% earnings surprise. With estimates on the rise and a bullish growth projection, this Zacks #1 rank stock is a healthy choice for momentum.

Company Description

Weight Watchers Int, Inc. provides weight management services worldwide. The company was founded in 1961.

Weight Watchers has turned into a bonified momentum high flyer, recently gapping higher to a new all-time high for the second time in the last two quarters after reporting strong Q1 results that came in ahead of expectations.

First-Quarter Results

Revenue for the period was up 30% from last year to $503 million. Earnings also came in strong at $1.00, 12% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 9% over the last four quarters.

The company posted a strong showing in North America, where sales were revenue was up 35% from last year. Internet revenue was also strong, up 66% with online paid weeks up 72%.

Financial Profile

The solid earnings momentum has enabled Weight Watchers to strengthen its balance sheet, with cash and equivalents up $25 million to $77 million while total debt fell $161 million to $1.26 billion.

Estimates

Even though estimates have been jumping for the last few quarters, we saw some more movement off the good quarter, with the current year up 21 cents to $3.94 while the next-year estimate gained 21 cents to $4.45, a 13% growth projection.

Valuation

In light of recent gains, WTW does trade at a premium to its peers, with a forward P/E of 21X against 15X.

6-Month Chart

On the chart, WTW just hit a new all-time high off the good quarter, with plenty of upward momentum in hand. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.

Please login to Zacks.com or register to post a comment.