Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

UBS cuts Weight Watchers stock target to $3, keeps neutral stance

EditorNatashya Angelica
Published 02/29/2024, 11:18 PM
© Reuters.
WW
-

On Thursday, UBS adjusted its outlook on Weight Watchers International (NASDAQ:WW), reducing the company's stock price target to $3.00 from the previous $9.00. Despite the significant decrease, the firm maintained a Neutral rating on the stock. The adjustment follows Weight Watchers' reported year-over-year (YoY) subscriber growth for the first time since 2020.

Weight Watchers concluded the fourth quarter of 2023 with a total subscriber increase of 7.1%, reaching 3.798 million subscribers. This growth is a notable change from the subscriber declines of 5.7% in 2021 and 15.0% in 2022. The North American market accounted for 2.499 million of these subscribers, with the remaining 1.299 million coming from international markets.

The company has now fully integrated its platform, connecting its core digital members to its emerging Clinical business. The integration strategy appears to be paying off, as evidenced by the increase in longer-term commitments from new subscribers.

Approximately 75% of sign-ups through January opted for a 10-month or longer subscription, compared to 25% in January 2023 and 45% throughout the entire previous year.

The Clinical business showed a strong performance in the fourth quarter, adding 22,000 members, which was a substantial increase from the 8,000 and 10,000 members added in the third and second quarters, respectively. Notably, the majority of the current 67,000 clinical members were previously subscribers to Weight Watchers' services.

Weight Watchers anticipates that its Clinical members will more than double in 2024, expecting to reach between 140,000 to 160,000 members and projecting revenues of approximately $100-110 million for the year, a significant jump from $30 million earned in roughly eight months of 2023.

Still, UBS suggests that the stock will likely hover around current levels until the business model demonstrates more certainty.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.