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Weight Watchers Gains 30% as the Oprah Effect Helps Project 2017 Growth
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Weight Watchers International, Inc. (WTW - Free Report) stock is up 30% in Wednesday trading to $18.34 per share one day after posting its fourth quarter 2016 financial results.
The New York City-based weight control company saw its shares pop 8.76% to $15.65 per share in after-hours trading Tuesday on the back of a fourth quarter earnings beat and subscription gains. Today, Weight Watchers keeps gaining as more customers sign up and commit to losing.
Weight Watchers membership rose 10% to more than 2.6 million in 2016, marking the first year-over-year increase since 2012. Fourth quarter 2016 subscriber numbers were up 9.7% from 2015, driven, in part, by big North American growth. Total paid weeks were up 10.1% from fourth quarter 2015. Declines in international markets offset bigger potential gains.
But Weight Watchers is set to close its Spanish subsidiary, which will reportedly provide a tax benefit.
The company projects it will make between $1.30 and $1.40 a share in 2017, which is above projected earnings. Weight Watchers saw revenue figures of $1.16 billion for fiscal 2016, up 1.4% from 2015.
“The Oprah Effect”
There is another major factor contributing to Weight Watchers’ soaring stock price: Oprah Winfrey.
Winfrey invested roughly $43 million in Oct. 2015 to purchase a 10% stake in Weight Watchers. At the time, shares were trading below $7. When Winfrey first announced her stake in the company, Weight Watchers shares jumped 30%.
Before Winfrey invested in the company, it had taken a nosedive from an all-time high of nearly $80 per share in Spring 2011 to under $4.00 by Summer 2015. Since then, the company has gained a little bit of momentum.
Winfrey first appeared in commercials for Weight Watchers shortly after investing in the company in 2015. And she recently claimed to have lost 40 pounds through Weight Watchers.
Weight Watchers debuted its second round of Winfrey TV advertisements on Dec. 26, 2016. In the ads, she speaks about how the program does not restrict her from living a happy life and never forces her to stop eating foods she enjoys.
Winfrey also uses her personal Twitter account to promote the company to her nearly 36 million followers.
And Winfrey carries a massive amount of clout.She ranks No. 4 in terms of celebrity influence behind only Kate Middleton, Bill Gates and Taylor Swift.
Potential Problems
The CEO of Weight Watchers stepped down at the end of Sep. 2016. Since then, CFO Nick Hotchkin and two other top executives have acted as interim CEOs while the company searches for a replacement. Winfrey has stated her intentions to help find a new head executive.
Still, despite the initial 2015 “Oprah Effect” and the recent massive gains on the back of a positive 2017 outlook, Weight Watchers was down more than 50% from Nov. 2015 until now.
Weight Watchers stock is also being heavily shorted. And the company has billions in debt, but it doesn’t have to start making payments until 2020.
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You'll also learn about 4 other exciting tech companies with jaw-dropping growth. Each could go public in the coming months.Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO Watch List today for free >>
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Weight Watchers Gains 30% as the Oprah Effect Helps Project 2017 Growth
Weight Watchers International, Inc. (WTW - Free Report) stock is up 30% in Wednesday trading to $18.34 per share one day after posting its fourth quarter 2016 financial results.
The New York City-based weight control company saw its shares pop 8.76% to $15.65 per share in after-hours trading Tuesday on the back of a fourth quarter earnings beat and subscription gains. Today, Weight Watchers keeps gaining as more customers sign up and commit to losing.
Weight Watchers membership rose 10% to more than 2.6 million in 2016, marking the first year-over-year increase since 2012. Fourth quarter 2016 subscriber numbers were up 9.7% from 2015, driven, in part, by big North American growth. Total paid weeks were up 10.1% from fourth quarter 2015. Declines in international markets offset bigger potential gains.
But Weight Watchers is set to close its Spanish subsidiary, which will reportedly provide a tax benefit.
The company projects it will make between $1.30 and $1.40 a share in 2017, which is above projected earnings. Weight Watchers saw revenue figures of $1.16 billion for fiscal 2016, up 1.4% from 2015.
“The Oprah Effect”
There is another major factor contributing to Weight Watchers’ soaring stock price: Oprah Winfrey.
Winfrey invested roughly $43 million in Oct. 2015 to purchase a 10% stake in Weight Watchers. At the time, shares were trading below $7. When Winfrey first announced her stake in the company, Weight Watchers shares jumped 30%.
Before Winfrey invested in the company, it had taken a nosedive from an all-time high of nearly $80 per share in Spring 2011 to under $4.00 by Summer 2015. Since then, the company has gained a little bit of momentum.
Winfrey first appeared in commercials for Weight Watchers shortly after investing in the company in 2015. And she recently claimed to have lost 40 pounds through Weight Watchers.
Weight Watchers debuted its second round of Winfrey TV advertisements on Dec. 26, 2016. In the ads, she speaks about how the program does not restrict her from living a happy life and never forces her to stop eating foods she enjoys.
Winfrey also uses her personal Twitter account to promote the company to her nearly 36 million followers.
And Winfrey carries a massive amount of clout.She ranks No. 4 in terms of celebrity influence behind only Kate Middleton, Bill Gates and Taylor Swift.
Potential Problems
The CEO of Weight Watchers stepped down at the end of Sep. 2016. Since then, CFO Nick Hotchkin and two other top executives have acted as interim CEOs while the company searches for a replacement. Winfrey has stated her intentions to help find a new head executive.
Still, despite the initial 2015 “Oprah Effect” and the recent massive gains on the back of a positive 2017 outlook, Weight Watchers was down more than 50% from Nov. 2015 until now.
Weight Watchers stock is also being heavily shorted. And the company has billions in debt, but it doesn’t have to start making payments until 2020.
Everything You Need to Know About Snapchat BEFORE It Goes Public
You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1? In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges.
You'll also learn about 4 other exciting tech companies with jaw-dropping growth. Each could go public in the coming months.Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO Watch List today for free >>