This Left-for-Dead Penny Stock Just Got a Major Boost. Should You Buy It Now?
WW International (WW), previously known as Weight Watchers, provides weight management services such as customized diet plans, weight loss programs, lifestyle tools, and more.
WW stock has struggled in recent years, leading it to fall into penny-stock territory with shares trading for less than $1. The company has lost more than 97% in the last five years, and many experts have written it off. Despite this, recent news has reignited a spark in the market, with the stock spiking nearly 50% in the last five days.
WW Partners With Eli Lilly
WW’s stock is up 50% over the past five trading sessions following its partnership agreement with Eli Lilly’s (LLY) LillyDirect Pharmacy provider, Gifthealth. The move aims to make Eli Lilly’s weight loss drug Zepbound more accessible for WW members.
As per the deal, eligible members will be able to procure Zepbound in single-dose vials, making it easy for self-paying and non-insured individuals to get the drug. Additionally, members will also be able to track their prescriptions in real-time using the WeightWatchers App.
This comes amid reports that WW International is preparing for a potential bankruptcy filing in the upcoming months as the company struggles to compete with the rise of GLP-1 weight loss drugs. However, its partnership with Eli Lilly to gain more exposure to the GLP-1 market could help its business sustain.
WW’s Recent Q4 Results
WW posted its fourth-quarter results back on Feb. 27. The company reported a profit of $25.1 million or $0.32 per adjusted share. The figure was a big beat on analysts’ $0.07-per-share estimates. WW generated revenue of $184.4 million, a 10.5% dip from last year’s figure but above analysts’ $175.7 million estimate.
WW’s operating income came to $36.2 million, up from a $6 million loss reported in the same quarter last year. Margins improved significantly. The gross margin came to 69.7% from 60.6% posted last year while the operating margin increased 2,256 basis points to 19.6%.
End-of-period subscribers were down 12.2% year-over-year to 3.3 million due to a slowdown in Digital subscribers and Workshop + Digital subscribers.
Wall Street was left unimpressed with the result with the stock sliding by more than 40% in the following few days. WW did not provide guidance for 2025 at the time.
Analyst Take on WW
Analysts aren’t very optimistic about the weight management company. WW has a consensus “Hold” rating on Wall Street with a mean price target of $0.94, signaling upside potential of 50%.
The stock has been studied by 4 analysts and received three “Hold” ratings and one “Strong Sell” rating.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.