Back to top

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

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Weight Watchers International (WW - Free Report) . WW is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 11.56, which compares to its industry's average of 14.79. Over the past year, WW's Forward P/E has been as high as 31.50 and as low as 5.58, with a median of 14.58.

WW is also sporting a PEG ratio of 0.92. 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 industry has an average PEG of 1.22 right now. Over the last 12 months, WW's PEG has been as high as 1.97 and as low as 0.24, with a median of 0.90.

Finally, investors will want to recognize that WW has a P/CF ratio of 5.68. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.11. Over the past year, WW's P/CF has been as high as 27.39 and as low as 4.90, with a median of 11.21.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Weight Watchers International is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, WW feels like a great value stock at the moment.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Weight Watchers International Inc (WW) - free report >>

Published in