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Weight Watchers International (WTW) Outpaces Stock Market Gains: What You Should Know

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Weight Watchers International (WTW - Free Report) closed at $29.55 in the latest trading session, marking a +1.62% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.64%. At the same time, the Dow added 0.7%, and the tech-heavy Nasdaq gained 0.91%.

Heading into today, shares of the weight-loss program operator had lost 11.18% over the past month, lagging the Consumer Discretionary sector's gain of 5.32% and the S&P 500's gain of 4.16% in that time.

Investors will be hoping for strength from WTW as it approaches its next earnings release, which is expected to be February 26, 2019. On that day, WTW is projected to report earnings of $0.60 per share, which would represent year-over-year growth of 62.16%. Our most recent consensus estimate is calling for quarterly revenue of $347.19 million, up 11.1% from the year-ago period.

Investors might also notice recent changes to analyst estimates for WTW. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 5.24% lower. WTW is currently a Zacks Rank #4 (Sell).

Digging into valuation, WTW currently has a Forward P/E ratio of 8.64. This represents a discount compared to its industry's average Forward P/E of 12.4.

Also, we should mention that WTW has a PEG ratio of 0.37. 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. The Consumer Services - Miscellaneous was holding an average PEG ratio of 1.3 at yesterday's closing price.

The Consumer Services - Miscellaneous industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 156, which puts it in the bottom 39% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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