WW International, Inc. (NASDAQ:WW) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
Investors in WW International, Inc. (NASDAQ:WW) had a good week, as its shares rose 6.6% to close at US$3.38 following the release of its full-year results. Revenues were in line with expectations, at US$890m, while statutory losses ballooned to US$1.46 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on WW International after the latest results.
Check out our latest analysis for WW International
After the latest results, the consensus from WW International's five analysts is for revenues of US$849.3m in 2024, which would reflect a small 4.5% decline in revenue compared to the last year of performance. The loss per share is expected to greatly reduce in the near future, narrowing 91% to US$0.12. Before this earnings announcement, the analysts had been modelling revenues of US$923.3m and losses of US$0.043 per share in 2024. While this year's revenue estimates dropped there was also a sizeable expansion in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The average price target fell 36% to US$6.58, implicitly signalling that lower earnings per share are a leading indicator for WW International's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic WW International analyst has a price target of US$12.50 per share, while the most pessimistic values it at US$1.50. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 4.5% annualised revenue decline to the end of 2024 is better than the historical trend, which saw revenues shrink 10% annually over the past five years By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 12% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect WW International to suffer worse than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at WW International. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for WW International going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for WW International (1 is potentially serious) you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
