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Are Investors Undervaluing Weight Watchers International (WW) Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Weight Watchers International (WW - Free Report) . WW is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 12.24. This compares to its industry's average Forward P/E of 15.89. WW's Forward P/E has been as high as 31.50 and as low as 5.58, with a median of 14.27, all within the past year.

WW is also sporting a PEG ratio of 0.98. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WW's industry has an average PEG of 1.31 right now. Within the past year, WW's PEG has been as high as 1.97 and as low as 0.24, with a median of 0.88.

Finally, investors should note that WW has a P/CF ratio of 6.11. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. WW's current P/CF looks attractive when compared to its industry's average P/CF of 6.34. WW's P/CF has been as high as 27.39 and as low as 4.90, with a median of 10.39, all within the past year.

These are only a few of the key metrics included in Weight Watchers International's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, WW looks like an impressive value stock at the moment.


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