Tuesday’s trading session saw WW International (WW) – better known as WeightWatchers – gain more than 61% on the stock market. The company’s shares spiked after news of its latest acquisition made waves.

The company closed a deal to acquire Sequence – a telehealth provider. While WW International has been known for its behavioral and diet-based weight management offerings, it’s branching out to offer a more robust solution. Now, the company is seeking to tap into obesity drugs.

Leveraging the Sequence acquisition, WW International will be able to offer its customers a pharmaceutical-based clinical subscription service to supercharge the rest of their regimen. The weight-loss drug market is one we’ve seen bloom before our eyes, and the company’s newfound channel for tapping into that is just what investors have been waiting for.

Amidst issues with falling subscribers and revenue, shares have dropped more than 38% in the past year. The company got a nice boost from the prospect of this deal back in March – as news of a potential acquisition sent shares 79% higher. Since then, though, the company saw those gains dissipate until yesterday.

Now, analysts have moved their price targets from as low as $3 to as high as $13. One expert suggests we could see a price surge as high as 216% after this acquisition.

It remains to be seen whether the $132 million deal with Sequence will prove effective in the long term. For now, the company is happy to have turned its negative price trend around – although shares Wednesday have already begun correcting. The stock is down 4% as of 12PM on April 12th.

With that said, what should you do with WW stock as a current or prospective investor? While there’s no question the timing is right for this stock, we’ve uncovered 2 things holding it back through the VectorVest stock analyzing system. Here’s what you need to know…

Very Poor Upside Potential and Poor Safety are Holding WW Back

The VectorVest system empowers investors to win more trades with less work. It’s all possible through the proprietary stock rating system, which gives you all the insights you need in 3 simple ratings. These are relative value (RV), relative safety (RS), and relative timing (RT).

Each of these sits on its own scale of 0.00-2.00, with 1.00 being the average. This makes interpretation easy. But, it actually gets even easier. VectorVest is able to provide you with a clear buy, sell, or hold recommendation based on these ratings for any given stock, at any given time. As for WW, here’s what we’ve found through the VectorVest system:

  • Very Poor Upside Potential: The RV rating is a comparison of a stock’s 3-year price projection with AAA corporate bond rates and risk. It offers investors far better insights than a simple comparison of price and value alone. And right now, the RV rating of 0.05 is about as poor as it gets. Plus, the stock is overvalued right now - with a current value of just $0.38.
  • Poor Safety: Moreover, the stock has a poor RS rating of 0.53. This is derived from the company’s financial consistency & predictability, debt-to-equity ratio, and business longevity.
  • Excellent Timing: The one thing WW has going for it is the strong price trend that took hold of the stock yesterday. As a result, the RT rating of 1.78 is excellent. This is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s calculated day over day, week over week, quarter over quarter, and year over year to paint the full picture for you.

The overall VST rating for WW is good at 1.14. So, is this stock worth adding to your portfolio if you don’t already have a stake in it? Does excellent timing outweigh very poor upside potential and poor safety, or is it the other way around?

You don’t have to play the guessing game or let emotion influence your decision-making. Get a clear answer on your next move with a free stock analysis at VectorVest today.

Weight Watchers (WW) stock analysis chart by VectorVest
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VectorVest advocates buying safe, undervalued stocks, rising in price. As for WW, it has very poor upside potential and poor safety - but the timing is excellent after the company’s acquisition of Sequence.

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