One stock that's having a hard time in these early days of 2024 is WW International (WW 10.06%), whose money asset is the famous Weight Watchers diet program. On Thursday, the company's shares took another body blow, closing nearly 8% lower on the back of a downbeat analyst note. That was a notably worse performance than the essentially flat movement of the S&P 500 index on the day.
Consumer interest weakening, says pundit
The analyst in question was Craig-Hallum's Alex Fuhrman, who wrote in a new research note that consumer interest in classic weight-loss methods is "down significantly" compared to last year's levels. WW International's Weight Watchers, which relies on calorie counting, is often cited as one of those methods.
Fuhrman's latest analysis is based on several metrics, such as internet searches and app downloads. As for the latter, he pointed out, WW International's app saw a 43% year-over-year decline in total number of downloads in the first eight days of this year. Noom, another dieting app, saw a 30% drop in the same period.
The analyst said that these drops are caused by several factors that have been in force for months. These include stiffer competition from free-of-charge dieting apps, the effects of inflation, and the sharply rising popularity of weight-loss medications (most prominently Novo Nordisk's Wegovy).
Fuhrman isn't necessarily bearish on WW International. In his analysis, he reiterated his hold recommendation on the stock and his price target of $8 per share.
New dieting solutions for a new age
It's never easy for any company dependent on a product or service that has been on the market for an extended stretch to stay relevant. WW International hasn't done a bad job staying afloat considering the age of its core offering, but this newish competition isn't (and won't be) easy to battle.
