Weight Watchers International, Inc. (WTW): Analysts Giving Thumbs Up or Thumbs Down?

Here’s how investors should make decisions about buying, holding or selling Weight Watchers International, Inc. (NASDAQ:WTW) stock. On Thursday, shares of Weight Watchers International, Inc. (NASDAQ:WTW) closed lower after an active session. The shares dropped -0.17 points or -0.84 percent at $20.09 with a light trade volume of 2.076 million shares. After opening the session at $20.29, the shares went as high as $20.41 and as low as $19.84, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $1.35 billion and now has 66.96 million shares outstanding. Weight Watchers International, Inc. (WTW) stock has lost -31.55 percent of market value in 21 trading days.

WTW stock has a trailing 3-year beta of 2.45, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $3.15 a share in the trailing twelve months. The stock’s value has fallen -47.89 percent year to date (YTD) against a decline of -69.28 percent in 12 month’s time. The company’s shares still trade -81 percent away from its 1-year high of $105.73 and 6.86 percent up from 52-week low of $18.80. The average consensus rating on the company is 3, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a hold.

Weight Watchers International, Inc. (WTW) will probably climb 44.35 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $47-month high price target. This represents a whopping 133.95 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $21.5, which represents a return potential of 7.02 percent when compared to the closing price of the stock of $20.09 on Thursday, March 14. The lowest price target for the stock is $14 — slightly more than -30.31 percent from WTW’s current share price.

History has shown that shares in Weight Watchers International, Inc. have gone down on 21 different earnings reaction days and are predicted to add 0.14 percent when the company reports upcoming earnings. Investors will get their next glimpse of WTW’s Q1 earnings on May 02. Analysts are forecasting revenue to suffer decline of -10.4 percent to $366M in the fiscal first quarter, while earnings are seen soaring by nearly -187.1 percent to -$0.27 per share. It earned $0.46 per share, worse than the $0.6, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $330M, worse than the $347M analysts expected. Earnings are estimated to increase by 140.9 percent this year, 43.15 percent next year and continue to increase by 35.4 percent annually for the next 5 years.

The stock is currently hovering around the first support level of $19.82. Below this, the next support is placed in the zone of $19.54. Till the time, the WTW stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 30.94 on daily chart, which may remain a cause for comfort. If the price breaks below $19.54 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $20.39 mark may result into a pull-back move towards $20.68 level.

Shares of Weight Watchers International, Inc. (WTW) are trading at a P/E ratio of 28.8 times earnings reported for the past 12 months. The industry WTW operates in has an average P/E of 61.37. Its P/E ratio went as low as 9.01X and as high as 40.81 over the 5-year span.Further, it is sporting a 0.89 on the Price-to-Sales ratio. Compare this with the industry average P/S of 2.23. 57.2 percent is the gross profit margin for Weight Watchers International, Inc. and operating margin sits at 25.7 percent. Along with this, the net profit margin is 14.8 percent.