WW International, Inc. WW stock has shown a remarkable performance in the past three months, outpacing the S&P 500 and the industry. In the same time frame, WW has surged 66.8% compared with the industry’s 31.7% rally and the S&P 500’s 9.2% rise.

On Monday, the stock closed at $1.28, significantly below its 52-week high of $9.77 but above its 52-week low of 67 cents. Over the past three months, WW has outpaced industry peer The Beachbody Company, Inc.’s BODI 4.4% decline, Planet Fitness, Inc.’s PLNT 26.1% gain and Xponential Fitness, Inc.’s XPOF 23.7% rise.

WW Stock’s Price Performance

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Technical indicators suggest a continued strong performance for WW. The stock is trading above its 50-day moving average, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment, and confidence in WW's financial health and prospects.

50-Day Moving Average

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Factors Favoring WW International Stock’s Surge

The recent increase in the company’s share price has largely been driven by the expansion of its clinical weight management services through the introduction of compounded semaglutide.

WW's focus on its clinical business has intensified following its acquisition of Sequence, tapping a high-demand market wherein up to 30 million people in the United States are expected to use GLP-1 medications by 2030. However, as is typical in early growth phases, this demand surge has attracted competitors, raising customer acquisition costs, and saturating key channels with content and information.

The rapid adoption of GLP-1 treatments has also outpaced supply, leading to drug shortages and necessitating the introduction of compounding solutions to meet demand. In response to these challenges, WW recently expanded its clinical weight management offerings by incorporating compounded semaglutide into its comprehensive formulary, including branded and generic medications. This move aims to address ongoing drug shortages while enhancing the accessibility and affordability of its weight management solutions.

WW has invested significantly in clinical research, boasting more than 175 published studies. The company's behavioral programs are 3.5 times more effective than standard nutritional guidance. Members combining GLP-1 medications with WW’s programs experience 11% greater weight loss than medication alone. These results highlight the value of pairing medical and behavioral solutions.

WW continues to leverage its highly engaged member base, with more than 60 million members historically, and a dynamic online and in-person community. Referrals contribute to higher retention and faster weight loss results.

The company is focusing on cost-saving efforts to drive margin. WW is on track to achieve its $100-million cost-saving target by the end of 2025. Conversely, the company prioritizes a seamless experience across its digital member offerings. Thus, enhancing this integration is critical for attracting and retaining members.

Estimate Revision Favoring the WW Stock

The Zacks Consensus Estimate for the 2024 adjusted loss per share has narrowed to 6 cents from 12 cents in the past 30 days. In 2023, the company had incurred an adjusted loss per share of 12 cents.

WW Trades at a Discount

WW International is currently valued at a discount compared with the industry on a forward 12-month P/S basis. WW’s forward 12-month price-to-sales ratio stands at 0.13, significantly lower than the industry.

P/S (F12M)

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Conclusion

WW International has demonstrated strong momentum, outperforming its industry and broader markets while making strategic moves to solidify its position in the growing clinical weight management sector. The company's proven behavioral programs have enhanced its value proposition for customers seeking comprehensive weight management solutions.

With a highly engaged member base, innovative clinical initiatives, cost-saving measures and favorable valuation compared to peers, WW is well-positioned for continued growth. These factors suggest significant upside potential, making WW an attractive buy for investors seeking exposure to this evolving market. The company sports a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

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Planet Fitness, Inc. (PLNT) : Free Stock Analysis Report

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