If a company's expenses are growing faster than their sales, this will reduce their margins. The stock is priced for growth, but valuation is not excessive considering the company's performance. It currently has a Growth Score of B. Some of the items you'll see in this category might look very familiar, while other items might be quite new to some. Weight Watchers stock is up almost 70% over the last three months, but the company is facing a number of issues that may hold back its revenue … It's another great way to determine whether a company is undervalued or overvalued with the denominator being cash flow. How good is it? Since there is a fair amount of discretion in what's included and not included in the 'ITDA' portion of this calculation, it is considered a non-GAAP metric. This is a medium-term price change metric (like the 4 week price change). ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities. The Cash/Price ratio is calculated as cash and marketable securities per share divided by the stock price. However, shares … 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. But they all have their place in the Growth style. 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 company is facing competition from the popular keto diet. On the revenue front, Estimates call for ~$347 million in sales. It’s hard to be overly bearish on a stock that’s already down 60% over the past year. 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. Copyright © 2020 InvestorPlace Media, LLC. WW is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The most common way this ratio is used is to compare it to other stocks and to compare it to the 10 Year T-Bill. The Growth Scorecard evaluates sales and earnings growth along with other important growth measures. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%. A value under 20 is generally considered good. Analysts had estimated earnings of $.19, and as Weight Watchers exceeded this expectation, analysts are slowly becoming more inclined to encourage the purchase of the stock. A D/E ratio of 1 means its debt is equivalent to its common equity. The longer-term perspective helps smooth out short-term events. A ratio under 40% is generally considered to be good.But note; this ratio can vary widely from industry to industry. This is a longer-term price change metric. Despite some of the seemingly positive developments at Weight Watchers, we have one true guide: price. This is also useful to know when comparing a stock's daily volume (which can be found on a ticker's hover-quote) to that of its average volume. While earnings are the driving metric behind stock prices, there wouldn't be any earnings to calculate if there weren't any sales to begin with. My Favorite Cybersecurity Stocks for 2021, This Software Stock is Ready to Drive Enterprises into the AI Future, Nio Is Pumping More Air Into the Chinese EV Bubble, Bionano Genomics News: Why BNGO Stock Is Rallying Today, 7 Penny Stocks on a Tear Right Now and Still Worth Buying, With or Without Apple Partnership, Nio Is Still a New Year Buy. For example, a stock trading at $35 with earnings of $3 would have an earnings yield of 0.0857 or 8.57%. A change in margin can reflect either a change in business conditions, or a company's cost controls, or both. Zacks Style Scores Education - Learn more about the Zacks Style Scores. And, of course, the 4 week change helps put the 1 week change into context. ET by Tomi Kilgore Oprah’s tour drove Weight Watchers … The Momentum Score takes all of this and more into account. There are 17 Sectors, 60 different M Industries, and 265 X Industries. That means these items are added back into the net income to produce this earnings number. Volume is a useful item in many ways. Earnings estimate revisions are the most important factor influencing stocks prices. Source: Shutterstock WW’s earnings are expected to plunge in 2019, based on the […] A P/B of 2 means it's selling at 2 times its book value. Like the P/E ratio, a lower number is considered better. 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. And margin rates can vary significantly across these different groups. But, it's made even more meaningful when looking at the longer-term 4 week percent change. A positive change in the cash flow is desired and shows that more 'cash' is coming in than 'cash' going out. 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. In short, this is how much a company is worth. WW is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. That does not mean that all companies with large growth rates will have a favorable Growth Score. A ratio of 2 means its assets are twice that of its liabilities. It's calculated as earnings divided by price. WW International, Inc. (WW) Quote Overview, WW International (WW) Beats Q3 Earnings Estimates. Return on Equity (or ROE) is calculated as income divided by average shareholder equity (past 12 months, including reinvested earnings). And within the M Industry, it might further be delineated into the X Industry group called Banks Northeast. Others look for those that have lagged the market, believing those are the ones ripe for the biggest increases to come. In contrast, the net income that goes into the earnings portion of the P/E ratio does not add these in, thus artificially reducing the income and skewing the P/E ratio. Weight Watchers' stock is on pace for its best day since Oct. 19, 2015, when they skyrocketed 105% after Oprah Winfrey announced she was … If the volume is too light, in absolute terms or for a relatively large position, it could be difficult to execute a trade. It is the most commonly used metric for determining a company's value relative to its earnings. While the hover-quote on Zacks.com, as well as the various tables, displays the delayed intraday quote and price change, this display shows the daily change as of the most recently completed trading day. WTW stock was at $80 in early 2012. While it will take time, Weight Watchers does have a strong brand and distribution footprint to work with. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. So be sure to compare it to its group when comparing stocks in different industries. If a stock's EPS consensus estimate is $1.10 now vs. $1.00 the week before, that will be reflected as a 10% change. Zacks Style Scores Education - Learn more about the Zacks Style Scores. This ratio essentially compares the P/E to its growth rate, thus, for many, telling a more complete story than just the P/E ratio alone. The (F1) EPS Estimate Monthly Change calculates the percentage change in the consensus earnings estimate for the current year (F1) over the last 4 weeks. So, when comparing one stock to another in a different industry, it's best make relative comparisons to that stock's respective industry values. The Weight Watchers International Inc. stock holds buy signals from both short and long-term moving averages giving a positive forecast for the stock, but the stock has a general sell signal from the relation between the two signals where the long-term average is above the short-term average. But when compared to its growth rate, it does't have the earnings growth to justify its P/E. The company's products and services are comprised of nutritional, activity, behavioral and lifestyle tools and approaches. 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. As we saw in Q3, the results do matter, even if the outlook is strong. Should we get it, then it can kickstart a larger rally, perhaps up to $40, where a prior downtrend line current resides. Simply put, it’s been a rough ride for WTW stock. 1125 N. Charles St, Baltimore, MD 21201. So, as with other valuation metrics, it's a good idea to compare it to its relevant industry. 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. 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. Remember, this is a ~$2 billion market cap company, so its balance sheet is somewhat less than ideal. The 4 week price change is a good reference point for the individual stock and how it's performed in relation to its peers. Revenue is set to grow more than 17% in fiscal 2018 and analysts see even more growth ahead. In general, the lower the ratio is the better. The advice algorithm takes into account all of Weight Watchers' available fundamental , technical, and predictive indicators you will find on this site. A sales/assets ratio of 2.50 means the company generated $2.50 in revenue for every $1.00 of assets on its books. If we get a positive reaction to earnings, I need to see a close over the 10-week moving average near $33.80. #Exclusive for You #1 Shop for Low Price Should You Buy Weight Watchers Stock And What Index To Buy Stock In Etrade . An industry with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's. The Villere Balanced Fund co-manager George Young discusses investment opportunities in today’s market. Once again, cash flow is net income plus depreciation and other non-cash charges. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. 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. George Young • December 13, 2018 • Fox Business Countdown to the Closing Bell. The Price to Sales ratio or P/S is calculated as price divided by sales. One of the reasons some investors prefer the P/S ratio over other metrics like the P/E ratio is because sales are harder to manipulate on an income statement than earnings. This shows the percentage of profit a company earns on its sales. Cash Flow is a measurement of a company's health. 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