WW International Inc WW, formerly known as Weight Watchers, will be reporting its third-quarter earnings post-market hours on Nov. 2.
The Street expects WW to report 12 cents in EPS and $221.59 million in revenue. Let’s look at how the business is doing, what analysts would be focusing on, and where Street estimates stand.
Business & Financials: Weight Watchers has been struggling with falling revenues and subscriber count for some time now. The company’s balance sheet has an enormous debt pile to the tune of $1.4 billion. That’s more than 2X its market cap, which stands close to $617 million.
Add to that the expensive $132 million Sequence Health acquisition; you’re left wondering how the company intends to manage its finances.
WW’s revenues are believed to have been impacted by diabetes-turned weight-loss drugs such as Ozempic, Wegovy, Mounjaro, and Trulicity. Mounjaro and Trulicity are manufactured by Eli Lilly and Co LLY and Ozempic and Wegovy come from the Novo Nordisk A/S NVO stable. With the acquisition of Sequence, WW intends to provide its new subscribers access to these GLP-1 medications.
Also Read: Check Out What Whales Are Doing With WW International
Q3 Analysts’ Focus: The company’s pivot towards weight loss medication is considered a wise move by some long-term investors. But analysts will be weighing the cost of this acquisition to the company and its balance sheet against a future revenue stream where competition already exists. Analysts will also be awaiting any commentary from company brass on managing the balance sheet and their view on the Sequence deal translating to revenues for the business.
Ratings & Consensus Estimates: The stock is rated a Buy with a price target of $12.60, according to six sell-side analysts. Morgan Stanley’s Lauren Schenk has a price target of $13 on the stock. Linda Bolton Weiser from DA Davidson sees the stock at $12.50 a share.
Price Action: The stock is down about 30% over the past month and was trading at $8 on Wednesday close.
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