Was Weight Watchers International Inc’s (NYSE:WTW) Earnings Growth Better Than The Industry’s?
Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Weight Watchers International Inc’s (NYSE:WTW) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. Check out our latest analysis for Weight Watchers International
Could WTW beat the long-term trend and outperform its industry?
I like to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This enables me to assess many different companies on a similar basis, using the latest information. For Weight Watchers International, its latest trailing-twelve-month earnings is US$191.97M, which, against the prior year’s figure, has climbed up by more than double. Given that these values are fairly short-term thinking, I have estimated an annualized five-year figure for Weight Watchers International’s earnings, which stands at US$161.61M This means on average, Weight Watchers International has been able to consistently improve its profits over the last few years as well.
What’s the driver of this growth? Let’s take a look at if it is only because of industry tailwinds, or if Weight Watchers International has experienced some company-specific growth. Although both top-line and bottom-line growth rates in the last couple of years, were, on average, negative, earnings were more so. While this has caused a margin contraction, it has moderated Weight Watchers International’s earnings contraction. Inspecting growth from a sector-level, the US consumer services industry has been growing its average earnings by double-digit 15.70% in the past twelve months, and 15.07% over the past half a decade. This means whatever uplift the industry is enjoying, Weight Watchers International is able to amplify this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Weight Watchers International gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Weight Watchers International to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for WTW’s future growth? Take a look at our free research report of analyst consensus for WTW’s outlook.
Financial Health: Is WTW’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
