Weight Watchers International (WTW) continues to defy the skeptics, recently hitting a new all-time high after reporting a 12% earnings surprise. With estimates on the rise and a bullish growth projection, this Zacks #1 rank stock is a healthy choice for momentum.
Company Description
Weight Watchers Int, Inc. provides weight management services worldwide. The company was founded in 1961.
Weight Watchers has turned into a bonified momentum high flyer, recently gapping higher to a new all-time high for the second time in the last two quarters after reporting strong Q1 results that came in ahead of expectations.
First-Quarter Results
Revenue for the period was up 30% from last year to $503 million. Earnings also came in strong at $1.00, 12% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 9% over the last four quarters.
The company posted a strong showing in North America, where sales were revenue was up 35% from last year. Internet revenue was also strong, up 66% with online paid weeks up 72%.
Financial Profile
The solid earnings momentum has enabled Weight Watchers to strengthen its balance sheet, with cash and equivalents up $25 million to $77 million while total debt fell $161 million to $1.26 billion.
Estimates
Even though estimates have been jumping for the last few quarters, we saw some more movement off the good quarter, with the current year up 21 cents to $3.94 while the next-year estimate gained 21 cents to $4.45, a 13% growth projection.
Valuation
In light of recent gains, WTW does trade at a premium to its peers, with a forward P/E of 21X against 15X.
6-Month Chart
On the chart, WTW just hit a new all-time high off the good quarter, with plenty of upward momentum in hand. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
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