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WW International Inc (WW)
:WW
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WW International
(NASDAQ:WW)
41Neutral
Positive Factors
Competitive Positioning
Increased restrictions on offering compounded GLP-1s is better for WW with superior competitive positioning in the branded space.
Earnings
WW's cost reduction program is starting to bear fruit with strong 4Q profitability.
Growth
The compounded medication launch does appear to be returning the Clinic sub base to growth.
Negative Factors
Market Challenges
WW's app downloads fell -39% y/y during peak diet season, signaling a tough environment.
Revenue Forecasts
Revising '25 forecasts: lower revenue/EBIT by -5%/-34%, base case range reduced.
Subscriber Decline
WW has underperformed through 2024 with Clinic contribution stalling, core behavioral subscribers down 17% year-over-year, and negative free cash flow.
WW International (WW) vs. S&P 500 (SPY)
Market Cap
$14.02M
Dividend YieldN/A
Average Volume (3M)3.23M
Price to Earnings (P/E)―
Beta (1Y)0.97
Revenue Growth-11.65%
EPS Growth-174.54%
CountryUS
Employees3,700
SectorConsumer Cyclical
Sector Strength55
IndustryPersonal Products & Services
Share Statistics
EPS (TTM)-4.37
Shares Outstanding80,127,090
10 Day Avg. Volume3,925,929
30 Day Avg. Volume3,225,781
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.06
Price to Cash Flow (P/CF)2.40
P/FCF Ratio0.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$1.10Price Target Upside478.95% Upside
Rating ConsensusHold
Number of Analyst Covering2
WW International Business Overview & Revenue Model
Company DescriptionWW International, Inc. provides weight management products and services worldwide. The company operates in four segments: North America, Continental Europe, United Kingdom, and Other. It offers a range of nutritional, activity, behavioral, and lifestyle tools and approaches products and services. The company also provides various digital subscription products to wellness and weight management business, which provide interactive and personalized resources that allow users to follow its weight management program through its app and Web-based products, including personal coaching and digital products; and allows members to inspire and support each other by sharing their experiences with other people on weight management and wellness journeys. In addition, it offers various consumer products, including bars, snacks, cookbooks, kitchen tools, and other products. Further, the company licenses its trademarks and other intellectual property in food, beverages, and other relevant consumer products and services, as well as provides publishing services. It offers products through e-commerce platforms and through partners. The company was formerly known as Weight Watchers International, Inc. and changed its name to WW International, Inc. in September 2019. WW International, Inc. was founded in 1961 and is headquartered in New York, New York.
How the Company Makes MoneyWW International generates revenue primarily through its subscription-based model. The company's key revenue streams include digital subscription packages, which provide access to the WW app and online community, as well as in-person and virtual workshops that offer guidance and support from trained coaches. Additionally, WW International earns from sales of branded products, including food items and wellness tools. Partnerships with other companies in the health and wellness space, as well as corporate wellness programs, also contribute to its earnings.
WW International Financial Statement Overview
Summary
WW International is facing significant financial challenges, with declining revenues, persistent losses, and a heavily leveraged balance sheet. The company is struggling to generate positive cash flow and maintain profitability. Immediate strategic actions are needed to stabilize operations and improve financial health.Income Statement
WW International has experienced a significant decline in revenue from previous years, with a notable revenue decrease of approximately 12.7% from 2023 to 2024. The company’s gross profit margin remains relatively stable, but the net profit margin is severely negative due to substantial net losses. Additionally, both EBIT and EBITDA margins are negative, indicating operational challenges and lack of profitability.45
Neutral
Balance Sheet
The balance sheet reflects a high level of financial risk, with stockholders’ equity being negative and deteriorating further over the years. The debt-to-equity ratio cannot be calculated due to negative equity, but the high total liabilities compared to assets suggest leverage concerns. The equity ratio is negative, highlighting the company's financial instability.30
Negative
Cash Flow
WW International's cash flow situation is concerning, with negative operating and free cash flows in 2024. The free cash flow has decreased year-over-year, indicating challenges in generating cash from operations. The operating cash flow to net income ratio is negative, reflecting inefficiencies in converting operating activities into profit.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 776.99M | 889.55M | 1.04B | 1.21B | 1.38B | Gross Profit |
| 533.10M | 529.30M | 622.40M | 726.36M | 777.84M | EBIT |
| -236.22M | 22.33M | 112.09M | 146.38M | 216.16M | EBITDA |
| -236.22M | 74.73M | -244.95M | 266.68M | 336.28M | Net Income Common Stockholders |
| -345.70M | -112.25M | -251.40M | 67.13M | 75.08M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 53.02M | 109.37M | 178.33M | 153.79M | 165.89M | Total Assets |
| 550.28M | 982.03M | 1.03B | 1.43B | 1.48B | Total Debt |
| 52.49M | 1.49B | 1.51B | 1.52B | 1.62B | Net Debt |
| -534.00K | 1.38B | 1.33B | 1.36B | 1.45B | Total Liabilities |
| 1.66B | 1.74B | 1.71B | 1.89B | 2.03B | Stockholders Equity |
| -1.11B | -761.09M | -683.82M | -456.40M | -548.21M |
| Cash Flow | Free Cash Flow | |||
| -17.56M | -29.61M | 38.39M | 119.63M | 85.51M | Operating Cash Flow |
| -16.84M | 6.69M | 76.65M | 157.28M | 135.94M | Investing Cash Flow |
| -16.41M | -74.70M | -42.64M | -52.75M | -65.59M | Financing Cash Flow |
| -17.34M | -2.75M | -4.72M | -111.54M | -95.54M |
WW International Technical Analysis
Negative
0.19
Price Trends
0.65
Negative
0.96
Negative
1.00
Negative
Market Momentum
-0.06
Negative
44.44
Neutral
26.27
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WW, the sentiment is Negative. The current price of 0.19 is below the 20-day moving average (MA) of 0.50, below the 50-day MA of 0.65, and below the 200-day MA of 1.00, indicating a bearish trend. The MACD of -0.06 indicates Negative momentum. The RSI at 44.44 is Neutral, neither overbought nor oversold. The STOCH value of 26.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WW.
WW International Risk Analysis
WW International disclosed 40 risk factors in its most recent earnings report. WW International reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
WW International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $3.66B | 25.27 | 8.40% | ― | 11.47% | 2.59% | |
78 Outperform | $1.50B | 28.38 | 23.11% | ― | 29.14% | 140.02% | |
66 Neutral | $742.79M | 2.72 | -31.74% | ― | -1.37% | 75.47% | |
59 Neutral | $11.76B | 10.11 | -0.70% | 3.92% | 1.27% | -16.30% | |
55 Neutral | $143.29M | 69.24 | 1.02% | ― | -43.80% | -97.89% | |
54 Neutral | $1.15B | 42.08 | 1.67% | ― | -4.59% | -42.81% | |
41 Neutral | $14.02M | ― | 31.02% | ― | -11.65% | -174.54% |
* Consumer Cyclical Sector Average
Performance Comparison
WW
WW International
0.19
-1.57
-89.20%
HLF
Herbalife
6.78
-1.52
-18.31%
SMPL
Simply Good Foods
36.27
4.13
12.85%
MED
Medifast
13.14
-18.80
-58.86%
THS
TreeHouse Foods
21.65
-15.41
-41.58%
VITL
Vital Farms
33.09
7.44
29.01%
WW International Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -76.25% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a company in transition, with notable growth in its clinical business and strong cost management offset by challenges in its behavioral business and subscriber base. The company's strategic focus on innovation and integration of offerings is promising, but significant debt and a competitive market environment pose ongoing challenges.Highlights
Growth in Clinical Subscribers
Clinical Subscribers returned to sequential growth, ending the year at 92,000, growing 18% from the third quarter and 38% year-over-year.
Strong Adjusted Gross Margin
Adjusted gross margin was near record highs at 69.1% in Q4, up from 61.4% in the prior year.
Cost Savings Initiatives
Achieved significant cost savings with adjusted G&A down 22% year-over-year in Q4. On track to achieve $100 million in run rate cost savings by the end of 2025.
Integration of Clinical and Behavioral Offerings
Integration of clinical and behavioral offerings showed that members on weight management medication combined with the behavioral program lose 11% more weight than those on medication alone.
Innovative Product Features
Launch of new features such as AI-powered food scanner and macro nutrient tracking, leading to a 5% increase in tracked food since launch.
Lowlights
Decline in Behavioral Business
Revenue from the behavioral business was down 12% year-over-year, contributing to an overall revenue decline of 10% in Q4.
Decreased Subscribers
End of Period Subscribers were 3.3 million, a decline of 12% year-over-year.
Debt and Capital Structure Challenges
Existing debt results in approximately $100 million of annual interest payments, limiting the company's ability to invest in growth initiatives.
Challenges in Marketing Environment
Elevated customer acquisition costs (CAC) in a competitive marketing environment, with ongoing recruitment challenges in the behavioral business.
Company Guidance
In the WeightWatchers Fourth Quarter and Full Year 2024 Results Conference Call, the company provided detailed guidance for 2025, highlighting several key metrics. WeightWatchers anticipates a starting revenue headwind of approximately $45 million due to a lower 2024 ending subscriber base. Despite this, the clinical business showed a robust 58% growth, while the behavioral business declined by 12%. The company is committed to removing $100 million in run rate costs by the end of 2025, with most actions already taken. Their adjusted gross margin reached near-record highs at 69.1% for the fourth quarter, and the adjusted operating income margin was 20%, with an adjusted EBITDA margin of 27.4%. With a significant focus on enhancing member experience and integrating clinical and behavioral offerings, WeightWatchers aims for stabilization and recovery in 2025, recognizing the ongoing challenge of approximately $100 million in annual interest payments due to existing debt.WW International Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
WW International Appoints New Chief Financial Officer
Positive
Nov 27, 2024
WW International, Inc., the global leader in weight management, has appointed Felicia DellaFortuna as the new Chief Financial Officer, effective January 1, 2025, succeeding Heather Stark. DellaFortuna brings a wealth of experience in strategic financial leadership and growth, having previously transformed BuzzFeed into a profitable digital media company. Her focus at WeightWatchers will be on fostering financial discipline and driving strategic initiatives to ensure sustainable growth and long-term success.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.