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Should Value Investors Buy Weight Watchers International (WW) Stock?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Weight Watchers International (WW - Free Report) is a stock many investors are watching right now. WW is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 12.98, while its industry has an average P/E of 15.55. Over the last 12 months, WW's Forward P/E has been as high as 31.50 and as low as 5.58, with a median of 14.99.

Investors should also note that WW holds a PEG ratio of 1.04. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. WW's PEG compares to its industry's average PEG of 1.28. WW's PEG has been as high as 1.97 and as low as 0.24, with a median of 0.90, all within the past year.

Finally, we should also recognize that WW has a P/CF ratio of 6.35. 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 P/CF compares to its industry's average P/CF of 6.62. WW's P/CF has been as high as 27.39 and as low as 4.90, with a median of 11.43, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Weight Watchers International is likely undervalued currently. And when considering the strength of its earnings outlook, WW sticks out at as one of the market's strongest value stocks.


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