Weight Watchers Can Continue to Outperform Post COVID-19

-Since our report ran 12 months ago WW’s stock has sharply outperformed the market

-COVID-19 is accelerating WW move to digital subscriptions, which could help margins

As US economy recovers, if subscribers continue to rise; WW stock could rise 30%-40%

A year has passed since I wrote about WW International (WW), formerly Weight Watchers (A Battered Weight Watchers Stock Looks Inexpensive, July 10, 2019).  I’m happy to report that since our piece was published its stock is up 20% to $25.73 recently, outperforming the Standard & Poor’s 500 index, up 8% over the same period.

Of course, the 12 months in between has been hair raising.  While the broad market, down 35% in March, has recovered most of its losses, WW hasn’t. It is off 45%, mostly on COVID-19 fear, from $47 in January. I should have taken a victory lap then! 

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I still favor WW shares and it could return to the mid $30s, or up 30%-40%.  (More on the valuation below.) The company continues to make slow but steady progress under CEO Mindy Grossman, who came aboard three years ago and is modernizing WW to a “wellness” firm from an old-fashioned “diet” company.  WW was already moving to a big emphasis on a digital approach from the ...
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