should i buy weight watchers stock

A ratio of 2 means its assets are twice that of its liabilities. The Current Ratio is defined as current assets divided by current liabilities. A higher number means the more debt a company has compared to its capital structure. They need a strong outlook from management to get this stock flying. A 'good' number would usually fall within the range of 1.5 to 3. But when compared to its growth rate, it does't have the earnings growth to justify its P/E. In general, a lower number or multiple is usually considered better that a higher one. For example, a company with a P/E ratio of 25 and a growth rate of 20% would have a PEG ratio of 1.25 (25 / 20 = 1.25). Some investors seek out stocks with the best percentage price change over the last 52 weeks, expecting that momentum to continue. With 12 weeks representing a meaningful part of a year, this time period will show whether a stock has been enjoying strong investor demand, or if it's in consolidation, or distress. A stock with a P/E ratio of 20, for example, is said to be trading at 20 times its annual earnings. Many investors prefer EV to just Market Cap as a better way to determine the value of a company. A rising stock on above average volume is typically a bullish sign whereas a declining stock on above average volume is typically bearish. A company with an ROE of 10%, for example, means it created 10 cents of assets for every $1 of shareholder equity in a given year. Simply put, it’s been a rough ride for WTW stock. NASDAQ data is at least 15 minutes delayed. An amazing first quarter. The ever popular one-page Snapshot reports are generated for virtually every single Zacks Ranked stock. First, let’s address the big thing we’ve all noticed in Weight Watchers International (NASDAQ:WTW) and that’s the stock has been a huge dud. The industry with the best average Zacks Rank would be considered the top industry (1 out of 265), which would place it in the top 1% of Zacks Ranked Industries. However, shares … For example, a P/S ratio of 0.5 means you're paying 50 cents for every $1 of sales the company makes. It is used to help gauge a company's financial health. Recent price changes and earnings estimate revisions indicate this would be a good stock for momentum investors with a Momentum Score of B. Copyright © 2020 InvestorPlace Media, LLC. This is useful for obvious reasons, but can also put the current day's intraday gains into better context by knowing if the recently completed trading day was up or down. Note; companies will typically sell for more than their book value in much the same way that a company will sell at a multiple of its earnings. The Earnings Yield (also known as the E/P ratio) measures the anticipated yield (or return) an investment in a stock could give you based on the earnings and the price paid. Weight Watchers stock also has a 17% short interest. Yet WTW stock (soon to be WW stock, as the company is changing its ticker) has deserved that steep decline. A D/E ratio of 2 might be par for the course in one industry, while 0.50 would be considered normal for another. Should WTW stock react negatively to earnings, look to see that the bottom of downtrend support holds, currently near $25. Interestingly enough though, management raised its full-year outlook in the quarter, so it’s surprising that investors didn’t cut WTW a little slack. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms and Conditions of Service. This is a medium-term price change metric. Momentum Style - Learn more about the Momentum Style. The 4 Week Price Change displays the percentage price change for the most recently completed 4 weeks (20 trading days). The Value Scorecard table also displays the values for its respective Industry along with the values and Value Score of its three closest peers. WW International, Inc., formerly Weight Watchers International, Inc., is a global company headquartered in the U.S. that offers various products and services, including weight loss and maintenance, fitness, and mindset such as the Weight Watchers comprehensive diet program. ET by Tomi Kilgore Oprah’s tour drove Weight Watchers … Using this item along with the 'Current Cash Flow Growth Rate' (in the Growth category above), and the 'Price to Cash Flow ratio' (several items above in this same Value category), will give you a well-rounded indication of the amount of cash they are generating, the rate of their cash flow growth, and the stock price relative to its cash flow. After the P/E ratio, it's one of the most common valuation metrics. WW International's (WW) Ready-to-Drink Coffee to Fuel Sales, The Zacks Analyst Blog Highlights: Peloton, Planet Fitness, Facebook, Alphabet and Weight Watchers. For example, a stock trading at $35 with earnings of $3 would have an earnings yield of 0.0857 or 8.57%. Copyright 2020 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606. As a result, the stock was up 9.9% as of 11:38 a.m. EDT. A company with a P/E ratio of 40 and a growth rate of 50% would have a PEG ratio of 0.80 (40 / 50 = 0.80). The 20 Day Average Volume is the average daily trading volume over the last 20 trading days. Debt to Equity (or D/E ratio) is total liabilities divided by total shareholder equity. Conventional wisdom also has it that if the yield on the stock market (S&P 500 for example) is lower that the yield on the 10 Yr., then stocks would be considered overvalued. It takes the consensus sales estimate for the current fiscal year (F1) divided by the sales for the last completed fiscal year (F0) (actual if reported, the consensus if not). If a company's expenses are growing faster than their sales, this will reduce their margins. A positive change in the cash flow is desired and shows that more 'cash' is coming in than 'cash' going out. The Villere Balanced Fund co-manager George Young discusses investment opportunities in today’s market. For many, that means dieting and exercise, which means more money for Weight Watchers. Published on December 14, 2015 at 9:43 am by Alisa Bahic in Hedge Funds , News Share Tweet Email So what. (Book value is defined as total assets minus liabilities, preferred stocks, and intangible assets.) The 1 Week Price Change displays the percentage price change over the last 5 trading days using the most recently completed close to the close from 5 days before. First, let's address the big thing we've all noticed in Weight Watchers International (NASDAQ:WTW) and that's the stock has been a huge dud. If a company's net margin is 15%, for example, that means its net income (or profit) is 15 cents for every $1 of sales the company makes. The stock is priced for growth, but valuation is not excessive considering the company's performance. Not only is that up almost 75% from fiscal 2017 (assuming WTW can deliver in-line or better Q4 results), but it also values WTW stock at just 10.3x earnings. If the P/S ratio is 1, that means you're paying $1 for every $1 of sales the company makes. Less than 1 means its liabilities exceed its short-term assets (cash, inventory, receivables, etc.). This list of both classic and unconventional valuation items helps separate which stocks are overvalued, rightly lowly valued, and temporarily undervalued which are poised to move higher. The Price to Sales ratio or P/S is calculated as price divided by sales. Learn more about Zacks Equity Research reports. Traditionally, investors would look at the stock with the lower P/E and deem it a bargain. For one, part of trading is being able to get in and out of a stock easily. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. Current Cash Flow Growth measures the percent change in the year over year Cash Flow. This longer-term historical perspective lets the user see how a company has grown over time. It all began in October 2015, when Oprah Winfrey announced that she’d acquired 10% of Weight Watchers as an investment, would join the Board of Directors, and serve as a spokesperson for the company. Should we get it, then it can kickstart a larger rally, perhaps up to $40, where a prior downtrend line current resides. The scores are based on the trading styles of Value, Growth, and Momentum. While our testing has found that a P/S ratio of <2 is the optimum range for returns, be sure to compare this ratio to its respective industry. Within each Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A, is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F. As an investor, you want to buy stocks with the highest probability of success. There's also a VGM Score ('V' for Value, 'G' for Growth and 'M' for Momentum), which combines the weighted average of the individual style scores into one score. Return on Equity (or ROE) is calculated as income divided by average shareholder equity (past 12 months, including reinvested earnings). Valuation metrics show that WW International, Inc. may be undervalued. But, typically, an aggressive growth trader will be interested in the higher growth rates. Within the VGM Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F. As an investor, you want to buy srocks with the highest probability of success. After all, Weight Watchers stock has fallen by 80% just since July. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%. George Young shares his insights on Weight Watchers with Liz Claman. View real-time stock prices and stock quotes for a full financial overview. It's packed with all of the company's key stats and salient decision making information. Many other growth items are considered as well. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.41% per year. While the F1 consensus estimate and revision is a key driver of stock prices, the Q1 consensus is an important item as well, especially over the short-term, and particularly as a stock approaches its earnings date. Like most ratios, this number will vary from industry to industry. A value under 20 is generally considered good. Growth Style - Learn more about the Growth Style. Seeing how a company makes use of its equity, and the return generated on it, is an important measure to look at. 6:26 PM ET. So the PEG ratio tells you what you're paying for each unit of earnings growth. This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. The value of Oprah Winfrey's stake in Weight Watchers has plunged too. Should You Buy Weight Watchers Stock Ahead of Earnings? Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. Investors use this metric to determine how a company's stock price stacks up to its intrinsic value. So, as with other valuation metrics, it's a good idea to compare it to its relevant industry. Debt to Capital (or D/C ratio) is the fraction of debt (including mortgages and long-term leases) to long-term capitalization. It's then divided by the number of shares outstanding to determine how much cash is generated per share. There are 17 Sectors, 60 different M Industries, and 265 X Industries. The Cash/Price ratio is calculated as cash and marketable securities per share divided by the stock price. Zacks Style Scores Education - Learn more about the Zacks Style Scores. Weight Watchers shares sank as the company's earnings underwhelmed. Moreover, when comparing stocks in different industries, it can become even more important to look at the relative measures, since different stocks in different industries have different values that are considered normal. The X Industry (aka Expanded Industry) is a subset of the M (Medium Sized) Industry, which is a subset of the larger Sector category, which is used to classify all of the stocks in the Zacks Universe. Historical EPS Growth Rate looks at the average annual (trailing 12 months) EPS growth rate over the last 3-5 years of actual earnings. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. This is also referred to as the cash yield. It's another great way to determine whether a company is undervalued or overvalued with the denominator being cash flow. But if guidance is weak, investors will ignore that catalyst. WW, formerly Weight Watchers, stock price target cut to $28 from $46 at B. Riley FBR Mar. Cash Flow per share ($/share) calculates the amount of incoming cash vs. the amount of outgoing cash for a company. Also, by looking at the rate of this item, rather than the actual dollar value, it makes for easier comparisons across the industry and peers. ) can be found on the stocks within their respective industry along with the worst average Zacks Rank of 1. The percent change current ratio is a good reference point typically a bullish sign whereas a stock! To 3 used metric for determining a company industry group called Banks Northeast undervalued to its liabilities reflect. 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